June 12 (Bloomberg) -- Confidence among U.S. consumers rose for a fourth straight month in June, reinforcing signs of an impending end to the recession, while prices of imported goods jumped as oil costs climbed.

The Reuters/University of Michigan preliminary index of consumer sentiment increased to 69, from 68.7 in May. The import-price index rose 1.3 percent in May, the most since July and in line with forecasts, a Labor Department report showed today in Washington.

The gain in confidence was less than economists had projected, and reflects a “dichotomy” between improving financial markets and the rising cost of gasoline, said Michael Feroli, an economist at JPMorgan Chase & Co. in New York. The reemergence of commodity-price inflation threatens to stunt the economic recovery and constrain corporate-profit growth.

“Consumers are acknowledging some improvement is under way, but they’re not seeing a tremendous potential for upside in the economy,” said Stephen Gallagher, chief U.S. economist at Societe Generale in New York.

Treasuries rose to their highest level of the day after the confidence report. Yields on benchmark 10-year notes dipped to 3.79 percent at 4:52 p.m. in New York from 3.86 percent late yesterday. The Standard & Poor’s 500 Stock Index rose 0.1 percent to close at 946.21.

The confidence index was forecast to rise to 69.5, according to the median of 62 economists surveyed by Bloomberg News. Estimates ranged from 65 to 73.2.

Current Conditions

A gauge of current conditions, which reflects Americans’ perceptions of their financial situation and whether it is a good time to buy big-ticket items such as cars, rose to 74.5, the highest since September, from 67.7.

An index of consumer expectations for six months from now, which more closely projects the direction of consumer spending, fell to 65.4 in June from 69.4 the prior month.

Prices of goods imported into the U.S. rose in May for the third straight month, reflecting the increasing cost of oil that threatens to undermine the economy just as it struggles to pull out of the recession. The gain in the index followed a revised 1.1 percent increase the prior month.

Prices excluding fuels climbed 0.2 percent from a month earlier and were down 5.8 percent on an annual basis -- the biggest drop since records began in 1985.

More Inflation

Consumers in today’s sentiment report said they expect an inflation rate of 3.1 percent over the next 12 months, after 2.8 percent in the May survey. Over the next five years, the measure tracked by Federal Reserve policy makers, Americans also expected a 3.1 percent rate of inflation, compared with their 2.9 percent forecast last month.

A report yesterday from Labor showed fewer Americans filed claims for unemployment benefits last week, indicating the deepest job cuts may be subsiding even as companies hold off on hiring. Initial jobless claims fell by 24,000 to 601,000 in the week ended June 6, the lowest level since January.

Still, the number of people collecting benefits rose to 6.82 million in the prior week, reaching a record for a 19th straight time. Moreover, a record loss of wealth is causing Americans to boost savings, and unemployment is forecast to keep rising, so any recovery will be slow to take hold.

Fed Chairman Ben S. Bernanke told Congress last week that the pace of the economy’s decline was slowing and consumer spending had stabilized. Still, he said, while the Obama administration’s fiscal stimulus will boost spending power, a weak job market, tight credit and falling wealth may curb sales.

‘Slight Uptick’

It took the pending demise of thousands of Chrysler LLC and General Motors Corp. dealers, which attracted shoppers back to auto showrooms, to send retail sales up for the first time in three months in May, figures from the Commerce Department showed yesterday. Higher gasoline prices also propelled the gain.

“It’s just a slight uptick,” Ken Czubay, Ford Motor Co. vice president of sales and marketing, said on a conference call June 2. “This is still a very fragile industry.”

The average price of a gallon of regular gasoline has risen by about $1 since the end of last year, according to AAA.

Personal spending, which accounts for 70 percent of the economy, will fall at a 0.6 percent annual pace in the current quarter and rise at an average 1.1 percent pace in the last six months of the year, according to the median forecast of economists surveyed this month. The projections were down from last month’s estimates.

For all of 2009, purchases will drop 0.7 percent, the worst performance since 1974, the survey showed. The economists surveyed also forecast the jobless rate, already at 9.4 percent as of May, will climb to 10 percent by the end of 2009, the highest rate since 1983.

To contact the reporter on this story: Courtney Schlisserman in Washington cschlisserma@bloomberg.net

Last Updated: June 12, 2009 17:03 EDT