US consumer confidence fell this month at the fastest pace this year, providing more evidence that the rebound that followed the Iraq war has stalled.
Further signs that the economy is struggling to emerge from the doldrums were highlighted in Commerce Department figures for US exports and imports, which both shrank in May, reflecting stagnant global demand.
The University of Michigan said its consumer sentiment index fell to 87.2 in June from 92.1 in May. The declines followed two months of rebounds in the wake of the Iraq war.
Most US analysts continue to assert that the sharp rise in stock prices over the past few months, coupled with low interest rates, drops in energy prices through March and April, and tax cuts will eventually lift the economy.
In a particularly troubling sign, the expectations component of the index - seen as its most important - fell sharply, coming back into line with weak current conditions.
The unemployment rate rose in May to a nine-year high of 6.1 per cent.
Separately the Commerce Department said the value of US exports sank to a 13-month low in May. Imports fell by a greater amount, reducing the monthly US deficit to $42 billion (€35.6 billion) in May from an upwardly revised $42.8 billion in April.
The report showed exports sank to $81 billion, their lowest level since April 2002. Imports fell by more than $2 billion to $125.71 billion.
The latest figures indicate stagnant demand inside and outside the US and that the dollar's fall has given little lift for exporters. - (Financial Times Service)
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