Consumer confidence craters in June

NEW YORK (CNNMoney.com) -- A key measure of consumer confidence fell in June, reversing a three-month gain, as Americans remain nervous about the job market.

The Conference Board, a New York-based research group, said its Consumer Confidence Index dropped to 52.9 in June from 62.7 in May. It was the lowest level since March, when the index stood at 52.3.

Economists had expected the index to have fallen to 62 in June, according to consensus estimates from Briefing.com.

"Increasing uncertainty and apprehension about the future state of the economy and labor market, no doubt a result of the recent slowdown in job growth, are the primary reasons for the sharp reversal in confidence," Lynn Franco, director of the Conference Board Consumer Research Center, said in a statement.

Consumer confidence had been recovering slowly since the index hit a record low of 25.3 in February 2009, but the gauge is still far from a reading above 90, which indicates the economy is stable, and 100 or above, which indicates strong growth.

The index that measures consumers' present level of confidence fell to 25.5 last month from 29.8 in May. The expectations index, which tracks consumers' expectations over the next few months, fell to 71.2 from 84.6.

Economists pay close attention to measures of consumer confidence as a proxy for consumer spending, which drives the bulk of the U.S. economy.

"Today's report on confidence provides little reason to expect a meaningful pickup in consumer spending in the near term," said Jim Baird, partner and chief strategist at Plante Moran Financial Advisors. "Consumers are still exceedingly nervous about the jobs market."

The percentage of consumers expecting more jobs in the months ahead fell in June to 16% from 20.2% the month before, according to the report. The percentage of those expecting fewer jobs increased.

"Although the economy is growing, consumers recognize that employers remain hesitant to hire and jobs are still hard to come by," Baird said.

Economists expect the government's monthly jobs report for June to show a decline of 100,000 jobs after temporary Census hiring led to the biggest monthly job gain in ten years during May.

Meanwhile, the government said last week that the economy grew at a slower pace in the first three months of this year than previously estimated.

Gross domestic product, the broadest measure of the nation's economic activity, grew at an annual rate of 2.7% in the first three months of 2010, according to the Commerce Department, down from the previous reading of a 3% rise.