US consumer sentiment edged lower in early April as a sluggish stock market, a slight rise in March unemployment and Middle East violence weighed on Americans' outlook for the future.
The University of Michigan's preliminary consumer sentiment index for April slipped to 94.4 from 95.7 in March, bucking analysts' forecasts for a rise to 96.5 as the US economy has recovered from the blow of the September 11th attacks.
Investors watch consumer confidence indices because they can offer hints on the future direction of consumer spending, which underpins two-thirds of the US economy.
Analysts don't expect spending to surge in coming months because consumer demand held up throughout the recession last year.
"What we're seeing here is the consumer getting a more realistic sense of what the recovery is going to be going forward," said Mr Joseph Abate, senior economist at Lehman Brothers. "It's going to be a subdued economic recovery, certainly by historical standards."
But economists said the slight dip in the index - its second so far this year - did not disrupt a clear upward trend since a low of 81.8 struck in September after the September 11th attacks.
The US government said last week ago the US jobless rate rose to 5.7 per cent in March from 5.5 per cent in February, showing that the recovery has yet to add jobs to the economy.
The preliminary consumer sentiment survey is based on telephone interviews with roughly 250 Americans across the country on personal finances, business conditions and buying conditions. It is rounded out to 500 calls by month's end.