By Xavier Fontdegloria
U.S. consumers' sentiment about the national economy slipped in the second half of June, remaining at subdued levels, according to a University of Michigan survey released Friday.
The final reading of the index of consumer sentiment was 85.5 in June, down from the mid-month flash estimate of 86.4 but above the 82.9 reading registered in May. The indicator missed expectations from economists polled by The Wall Street Journal, who forecast consumer sentiment index to come in at 86.5.
Sentiment among American consumers in June rose compared with the previous month thanks to a more upbeat view on the short-term expectations, while current conditions deteriorated slightly.
"All of the June gain was among households with incomes above $100,000, and mainly in the way they judged future economic prospects," said Richard Curtin, the survey's chief economist.
The consumer sentiment index rose sharply in March and April amid the reopening of the economy and fiscal support to households, but dropped in May as inflation fears clouded consumers outlook. The indicator remains well below the 101.0 level registered in February 2020, before the pandemic hit the U.S.
The index of consumer expectations, which reflects the balance of respondents anticipating improved business conditions in the next six months, increased to 83.5 from the 78.8 reading registered in May but slightly below the preliminary estimate of 83.8.
More than half of those surveyed expected declines in unemployment rate in the year ahead, and nearly three-quarters of all consumers expected rising interest rates in the next 12 months, the report said.
The index gauging Americans' assessment of the current economic conditions fell to 88.6 in June from 89.4 in May, reversing all gains registered in the 90.6 mid-month reading.
"While many are optimistic about a gradual end to the pandemic, consumers still judged the risks from emerging Covid-19 variants as appreciable," Mr. Curtin said.
Write to Xavier Fontdegloria at xavier.fontdegloria@wsj.com