U.S. Consumer Confidence Shows Sharp Pullback In July

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Confidence among U.S. consumers has seen a substantial deterioration in the month of July, according to a report released by the Conference Board on Tuesday.

The Conference Board said its consumer confidence index tumbled to 90.9 in July from a downwardly revised 99.8 in June.

Economists had expected the index to show a much more modest decrease to a reading of 99.6 from the 101.4 originally reported for the previous month.

Lynn Franco, Director of Economic Indicators at the Conference Board, said, "A less optimistic outlook for the labor market, and perhaps the uncertainty and volatility in financial markets prompted by the situation in Greece and China, appears to have shaken consumers' confidence."

"Overall, the Index remains at levels associated with an expanding economy and a relatively confident consumer," she added.

The much bigger than expected drop by the headline index primarily reflected a sharp decrease in consumer optimism about the short-term outlook, as the expectations index plunged to 79.9 in July from 92.8 in June.

The percentage of consumers expecting business conditions to improve over the next six months fell to 14.7 percent from 17.9 percent, while those expecting conditions to worsen edged up to 10.7 percent from 10.2 percent.

The outlook for the labor market was also less optimistic, as consumers anticipating more jobs in the months ahead dropped to 13.1 percent from 17.1 percent and those anticipating fewer jobs rose to 20.0 percent from 15.2 percent.

The Conference Board said consumers' assessment of current conditions was also somewhat less favorable, with the present situation index sliding to 107.4 in July from 110.3 last month.

Consumers saying business conditions are "good" decreased to 24.2 percent from 26.1 percent, while the percentage claiming business conditions are "bad" was virtually unchanged at 17.9 percent.

The report said consumers were also slightly less positive about the job market, as those saying jobs are "plentiful" dipped to 20.7 percent from 21.3 percent and those claiming jobs are "hard to get" inched up to 26.7 percent from 26.1 percent.

Friday morning, the University of Michigan is scheduled to release its revised report on consumer sentiment in the month of July.

Economists currently expect the consumer sentiment index to be upwardly revised to 94.1 from the preliminary reading of 93.3. The index would still be below the final June reading of 96.1.

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