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Consumer Confidence Dips

The Consumer Confidence Index retreated a bit further in July to 46.6, down from 49.3 in June, according to the Conference Board. The research organization, which maintains the index based on a sample of 5,000 U.S. households, said its Present Situation Index decreased to 23.4 from 25.0 last month and the Expectations Index declined to 62.0 from 65.5 in June.

Custom research company TNS conducts the survey for the Conference Board. The cutoff date for July's preliminary results was July 21. “Consumer confidence, which had rebounded strongly in late spring, has faded in the last two months,” said Lynn Franco, director of The Conference Board Consumer Research Center.

“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. 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,” she said. “However, more consumers are pessimistic about their income expectations, which does not bode well for spending in the months ahead.”

Consumers continued to rate current conditions unfavorably in July. Those saying business conditions are “bad” increased to 46.3% from 45.3%, while those saying conditions are “good” increased to 9.1% from 8.1%.

Consumers' assessment of the labor market deteriorated further. Those claiming jobs are “hard to get” increased to 48.1% from 44.8%, while those claiming jobs are “plentiful” decreased to 3.6% from 4.5%.

Consumers remain quite pessimistic about the short-term outlook, the Conference Board said. The percent of consumers anticipating an improvement in business conditions over the next six months decreased to 18% from 20.9%, and those expecting conditions to worsen decreased to 18.9% from 20.4%.

The labor market outlook was also mixed. The percentage of consumers expecting more jobs in the months ahead decreased to 15% from 17.5%, and those expecting fewer jobs decreased to 26.3% from 27.6%. The proportion of consumers expecting an increase in their incomes declined to 9.5% from 10.1%.

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