RTTNews - Consumer confidence deteriorated by more than expected in the month of July, according to a report released by the Conference Board on Tuesday, with the decrease reflecting less favorable assessments of both current conditions and the near-term outlook.
The Conference Board said that its consumer confidence index fell to 46.6 in July from an unrevised 49.3 in June. Economists had been expecting a much more modest decline by the index to a reading of about 49.0.
Lynn Franco, Director of the Conference Board Consumer Research Center said, Consumer confidence, which had rebounded strongly in late spring, has faded in the last two months.
A deterioration in consumers' assessment of current conditions contributed to the decrease, with the present situation index falling to 23.4 in July from 25.0 in June.
The decline in the Present Situation Index was caused primarily by a worsening job market, as the percent of consumers claiming jobs are hard to get rose sharply, Franco said.
The report showed that those claiming jobs are hard to get rose to 48.1 in July from 44.8 in June, while those claiming jobs are plentiful fell to 3.6 percent from 4.5 percent.
While those saying current business conditions are bad increased to 46.3 in July percent from 45.3 percent in June, those saying conditions are good also rose to 9.1 percent from 8.1 percent.
Consumers also remain quite pessimistic about the short-term outlook, with the expectations index falling to 62.0 in July from 65.5 in the previous month.
Franco said, The decline in the Expectations Index was more the result of an increase in the proportion of consumers expecting no change in business and labor market conditions, as opposed to an increase in the percent of consumers expecting conditions to deteriorate further.
The Conference Board said the percent of consumers anticipating an improvement in business conditions over the next six months decreased to 18.0 percent in July from 20.9 percent in June. At the same time, those expecting conditions to worsen fell to 18.9 percent from 20.4 percent.
Consumer also had a mixed outlook for the labor market. Those expecting more jobs in the months ahead fell to 15.0 in July from 17.5 in June, while those expecting fewer jobs decreased to 26.3 percent from 27.6 percent.
Last Friday, Reuters and the University of Michigan released a report showing an upward revision to their consumer sentiment index for the month of July, although the reading still came in well below the previous month.
The report showed that consumer sentiment index for July came in at 66.0 compared to the preliminary reading of 64.6, but it remains below a reading of 70.8 for June. Economists had expected the index to be revised up to 65.0.
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