* Confidence up more than expected, highest since Dec 07
* Future economic expectations up, current perception falls
* Analysts caution that improvement may be premature
(adds analysts comment, details)
By Daniel Flynn
ROME, June 24 (Reuters) - Italian consumer confidence rose by more than expected in June to reach its highest level since December 2007 because Italians became more upbeat about the prospects for the national economy, job market and savings.
Research institute ISAE's seasonally adjusted consumer confidence index, released on Wednesday, rose to 105.4 in June from 104.9 the previous month, just topping the median forecast in a Reuters survey of analysts of 105.1.
"The increased confidence of consumers reflects probably the perception that worst part of the crisis could be behind us," said Marco Valli of Unicredit Mib. "It seems to me, however, that this is too optimistic an interpretation ... We are still in full recession and we will remain there for a while."
The Organisation for Economic Cooperation and Development on Wednesday cut its forecast for the euro zone's third largest economy this year for the second time in a week, to a 5.5 percent contraction, and kept its outlook for a weak recovery in 2010.
Italy is mired in its worst recession since World War Two, after its economy contracted 1 percent in 2008.
ISAE noted that while perceptions about the current economic situation worsened slightly, to 112 from 113.3 in May, consumers grew more optimistic about the outlook for the economy in general, the job market and their ability to save.
Expectations for the future economic climate climbed to 98.1 versus 94.5 in May, the highest level since May 2008.
"The data surprised me: an improvement in the unemployment situation was something we weren't expecting. Indeed, we expected a worsening," said Annamaria Grimaldi of Intesa Sanpaolo. "But let's not forget that the confidence indicator trend is not necessarily tied to hard economic data."
Figures from the ISTAT national statistics agency showed on Wednesday that retail sales in April fell by 0.4 percent month on month, after a revised 0.2 percent increase in March. They were down by 0.6 percent year-on-year. (Additional reporting by Alessia Pe and Valentina Za; Editing by Ruth Pitchford)