Consumer confidence fades

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Friday, June 13, 2003 | 10:56 a.m.

SUN WIRE REPORTS

WASHINGTON -- U.S. consumer confidence unexpectedly faded this month as rising unemployment sapped optimism, a University of Michigan survey found.

The university's preliminary June sentiment index fell to 87.2 from 92.1 last month, Bloomberg News reported today. The decline was the biggest since October as consumer expectations plunged the most since January. Economists surveyed by Bloomberg News had expected a third straight rise.

Consumers are still worried about their prospects as the unemployment rate expands and payrolls decline, economists said.

Meanwhile, the Labor Department reported today that wholesale prices dipped by 0.3 percent in May, on the heels of a record drop registered the month before, underscoring Federal Reserve concerns about the possibility of the country facing an economically dangerous price decline.

Last month's decline in the Producer Price Index, which measures prices before they reach consumers, came after wholesale prices plunged by 1.9 percent in April, the biggest monthly drop ever registered.