Consumer Sentiment Index Drops in July

Americans’ anxiety about the economy and their jobs resurfaced in July, sending a widely followed measure of consumer confidence downward and ending a three-month winning streak.

The Conference Board said Tuesday that its consumer confidence index fell to 103.2 from a revised 106.2 in June. The July figure was worse than the 106.2 analysts had expected.

In May, the index rose to 103.1 from April’s 97.5.

Lynn Franco, director of the private research group’s Consumer Research Center, said the dip was “no cause for concern.”

“The overall state of the economy remains healthy and consumers’ outlook suggests no storm clouds on the short-term horizon,” Franco said. “Even the steady upward tick of fuel prices at the pump has done relatively little to dampen consumers’ spirits. Yet, while there is little to suggest a downturn in activity, there is also little to suggest a pickup.”

Economists closely track consumer confidence because consumer spending accounts for two-thirds of all U.S. economic activity.

One component of the Conference Board report, which looks at consumers’ views of the current economic situation, fell to 118.5 from 120.8. Another component, the expectations index, which measures consumers’ outlook over the next six months, declined to 93% from 96.4 in June.

The outlook for the labor market was mixed. The number of consumers expecting more jobs to become available in the coming months edged up to 15.8% from 15.4%, while those expecting fewer jobs moved up to 16.8% from 16.4% in June.

The proportion of consumers anticipating that their incomes would increase in the months ahead declined to 18.6% from 19.9%.

Consumers’ overall assessment of continuing conditions was somewhat mixed in July. The number of those claiming business conditions were “bad” increased to 16.9% from 15.3%. However, those saying conditions were “good” improved to 28.7% from 26.7%.

Consumers’ outlook for the next six months was marginally less favorable than in June. Those expecting business conditions to improve fell to 17.6% from 19.5%. Consumers anticipating that business conditions would worsen edged up to 9.6% from 9%.