Consumer confidence fell slightly in July dipping to 80.3 from 82.1 in June. The decline in July stemmed from a somewhat less optimistic view of the next six months. The so-called expectations index dropped to 84.7 from 91.1 as Americans see fewer jobs being available later in the year.
By Jeffry Bartash
July 30, 2013, 11:00 a.m. EDT
Market Watch
WASHINGTON (MarketWatch) — Consumer confidence fell slightly in July one month after touching a five-year high, but Americans’ views of the economy suggest growth could strengthen “in the months ahead,” according to a closely followed survey.
The consumer confidence index dipped to 80.3 from upwardly revised 82.1 in June, the Conference Board said Tuesday. Economists polled by MarketWatch had expected the index to fall to 81.1 last month owing to rising gasoline prices and some whipsawing in the stock market.
In U.S. markets, investors mostly shrugged off the report and appeared to focus on corporate earnings and the latest Federal Reserve meeting.
The decline in consumer confidence in July stemmed entirely from a somewhat less optimistic view of the next six months. The so-called expectations index dropped to 84.7 from 91.1.
The reason: Americans see fewer jobs being available later in the year. The percentage of people who expect more jobs in the months ahead declined to 16.5% from 19.7%, while the number who anticipate few jobs rose to 18.1% from 16.1%.
Yet consumers actually expressed greater optimism about the economy right now. The present situation index climbed to 73.6 from 68.7 to mark the highest level since early 2008.
“Consumers’ assessment of current conditions continues to gain ground and expectations remain in expansionary territory despite the July retreat,” said Lynn Franco, director of economic indicators at the privately run nonprofit organization. “Overall, indications are that the economy is strengthening and may even gain some momentum in the months ahead.”
Although the index remains near a five-year high, consumer confidence is still well below its pre-recession peak. The index reached as high as 111.9 shortly before the last downturn began in December 2007.
Still, other surveys also show confidence at or near multi-year highs and that could bode well for the economy if consumers become more upbeat.
The telling factor will be the health of the labor market. The U.S. had added an average of 200,000 jobs through the first six months of 2013 and economists expect a net gain of around 175,000 in July. At that pace, the nation’s 7.6% unemployment rate would continue to gradually decline.
If hiring holds steady or accelerates, confidence is likely to improve, but a decline in job creation would sap the economy of any momentum.
The latest monthly employment report will be issued Friday.
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