U.S. consumer confidence rose to a nine-month high in June but failed again to surpass its level of September 2008, when the spectacular failure of Lehman Brothers sent the world economy into a tailspin, a survey showed on Friday.
The Reuters/University of Michigan Surveys of Consumers said its preliminary index of confidence for June rose to 69.0 from May's 68.7. That was slightly below economists' expectations of 69.5, according to a Reuters poll.
Worryingly, the report's gauges of inflation expectations rose to their highest in months, creating concern for the Federal Reserve, which has pumped money into the financial system to spur recovery from the worst recession in decades.
For the third month now the overall consumer sentiment reading was at its highest since the Lehman debacle last September, which caused severe strains in financial markets, while not breaking through that month's level of 70.3.
Indeed, the economic damage done by that episode is still being felt and may linger for a long time to come, consumers worry, overshadowing perceptions of economic recovery.
"Job and income uncertainty, however, remained high and constitute a significant barrier for completing planned purchases," the Surveys of Consumers said in its report. "The economic recovery was thought to be weaker than originally anticipated, leading consumers to expect a longer period of time before the recovery gets underway."
Reflecting ongoing worries, consumers' assessment of the 12-month economic outlook fell, with that gauge declining to 61 in June from 75 in May.
Their one-year inflation expectations rose to 3.1 percent in June—the highest since October 2008—from May's 2.8 percent.
The five-year inflation outlook rose to 3.1 percent in June from May's 2.9 percent. That was the highest in the long-term inflation expectations since February this year.