To American consumers, the economy doesn’t look so hot in July.

The Reuters/University of Michigan preliminary index of consumer sentiment decreased to 64.6, the lowest reading since March, from 70.8 in June. During the expansion that began in late 2001 and ended in December 2007, the index averaged 89.2.

The drop in confidence was more than forecast and reflected concerns about unemployment and higher gasoline prices, Bloomberg reported.

Unemployment last month rose to the highest level since 1983, and lower home values and rising gasoline costs are eroding Americans’ wealth. The report signals that consumer spending, which accounts for about 70 percent of gross domestic product, may remain subdued even as the economy starts to recover.

“The consumer needs to see job losses not just lessening but stopping,” Michael Gregory, a senior economist at BMO Capital Markets in Toronto, told Bloomberg. “Until that happens, it’s going to keep big chunks of consumer spending at bay.”

The confidence index had been forecasted to dip to 70, according to the median estimates by 59 economists surveyed by Bloomberg News. The estimates ranged from 65 to 72. The measure averaged 63.8 in 2008.

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 like cars, fell to 70.4 from 73.2.

The index of consumer expectations for six months from now, which more closely projects the direction of consumer spending, plunged to 60.9 from 69.2, the biggest drop since October.