A pedestrian is seen reflected in the window of a shoe store on April 16, 2012 in New York City.
Plagued by worries about flagging job creation, a slowing economy, and financial chaos across the pond, U.S. consumers are growing increasingly pessimistic about the prospects for the economy.
Morale in June fell to its lowest level since December, according to the Reuters/University of Michigan consumer sentiment index, skirting levels not seen since the Great Recession. This measure of consumer confidence comes on the heels of The Conference Board's consumer confidence index, which fell for the fourth month in a row in June.
"The message is loud and clear—consumers are not happy," Chris Christopher, economist at IHS Global Insight, wrote in a report Friday.
And retailers are feeling the pain. Spending has taken a hit on many fronts, including auto sales, which were surprisingly strong earlier this year. That's bad news for an economy that heavily depends on consumer spending to sustain it and fuel growth.
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One big reason Americans are feeling a little less comfortable about shelling out their hard earned cash is the chronic high unemployment rate—above 8 percent for 40 straight months now—and months of disappointing job gains for the economy. Stagnant wage growth has also had a hand in making consumers think twice about opening their wallets.
On top of dimming hopes for the economy stateside, news of bank bailouts and general financial chaos in Europe have also stoked worries about the global economy and the possibility that a recession in Europe could bring the U.S. economy down with it.
Bottom line: Although most economists don't think the United States is heading toward another recession, there are still plenty of risk factors—and consumers know it.
One sliver of good news for consumers? They'll probably be getting a break at the gas station this summer. Prices are heading down, which gives a little cushion for households with tight budgets.
Meg Handley is a business reporter for U.S. News & World Report. You can reach her at mhandley@usnews.com and follow her on Twitter.
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