Consumer Confidence, Jobless Reports Due

Stock market declines and a slowdown in economic growth have damped U.S. consumer confidence, making companies reluctant to hire and restraining the factory rebound, reports this week are likely to show.

A report Wednesday on gross domestic product probably will show that the economy expanded at a 2.3% annual pace from April through June, following a 6.1% growth rate in the first quarter, based on the median of 59 forecasts in a Bloomberg News survey.

Friday’s report on July unemployment probably will show that the rate of joblessness remained at 5.9%, close to the 7 1/2-year high of 6% in April, economists said.

Confidence in the economy may be declining because the stock market is flagging. On Tuesday, the Conference Board’s consumer confidence index will be issued and probably will show a drop to 101.5 in July, the lowest reading since February, from 106.4 in June.

People who have jobs keep spending because their incomes are rising, a report Friday from the Commerce Department also may show. Consumer spending accounts for more than two-thirds of the economy and is underpinning the recovery.

Manufacturing probably grew in July at a slower rate than in the previous month, a report Thursday from the Institute for Supply Management is expected to show. The group’s factory index probably fell to 54.9 this month from 56.2 in June.

Other reports this week:

* Wednesday, the National Assn. of Purchasing Management-Chicago is expected to report a July factory index of 56.5, down from 58.2 in June.

* Thursday, the Commerce Department probably will report a 0.2% increase in June construction spending.