Uni Michigan sentiment falls from 96.1 to 93.3 in July

US consumer sentiment fell to a preliminary reading of 93.3 from a final level of 96.1 last month, according to reports on the University of Michigan gauge released Friday

Economists, who follow readings on confidence in a bid to shed light on consumer spending trends, the backbone of the economy, had expected a July figure of 95.

The rise in gasoline prices over the last few months and the escalation of the crisis in Greece weighed on the gauge, although the index remained comfortably above the 86.9 level it averaged in the 12 months leading up the economic crisis.

The expectations sub-index fell to 85.2 from 87.8 in June, although it remained consistent with consumption growth of around 5% annualised, which analysts said could suggest that the unexpected decline in June’s retail sales is not the start of a period of sustained weakness.

The current conditions sub-index also fell, from 108.9 in June to 106.0 in July.

"While the fall in consumer confidence means the outlook for consumption growth is a little less rosy, it is still on course for a 2.7% annualised gain in the second quarter," said Adam Collins, assistant economist at Capital Economics.

"With the labour market remaining buoyant we expect that consumption growth will remain strong in the second half of the year."