Consumer confidence improves slightly in July
Consumers were a bit more optimistic about the economy in July, but confidence remains low, according to the Conference Board.
The group’s consumer confidence index, released Tuesday, was up slightly in July to 65.9 from 62.7 in June, the first increase in five months. Consumers were more optimistic about their short-term economic prospects despite increasing signs that the recovery has slowed to a crawl.
“Despite this month’s improvement in confidence, the overall index remains at historically low levels,” said Lynn Franco, director of economic indicators at the Conference Board.
The percentage of consumers expecting improved business conditions over the next six months increased to 18.9% in July from 16% in June. And 17.6% of consumers said they expected more jobs to be created over the same period, up from 14.8% last month.
Although consumers were more optimistic about short-term prospects for U.S. businesses and the jobs market, they were more pessimistic about their earning power. The percentage of consumers who expected their incomes to increase over the next six months dropped to 14.2% in July from 15.3% in June.
The Conference Board report was released as the government said personal income rose 0.5% in June. But reflecting continued concerns about the economy, personal spending was flat in June, meaning people did not spend the extra money.
Thomson Reuters and the University of Michigan reported last week that consumer confidence had dropped in July to its lowest level of the year.
Although the Conference Board’s results did not agree, Franco said consumer confidence would probably remain low unless stronger growth kicks in. The Federal Reserve began two days of meetings Tuesday amid calls for it to do more to stimulate the economy.
“Given the current economic environment — in particular the weak labor market — consumer confidence is not likely to gain any significant momentum in the coming months,” Franco said.
