After reporting a substantial improvement in U.S. consumer confidence in the previous month, the Conference Board released a report on Tuesday showing consumer confidence deteriorated by more than expected in the month of July.
The Conference Board said its consumer confidence index slumped to 92.6 in July after jumping to an upwardly revised 98.3 in June.
Economists had expected the consumer confidence index to pull back to 95.7 from the 98.1 originally reported for the previous month.
The bigger than expected drop by the headline index came as consumers grew less optimistic about the short-term outlook for the economy, with the expectations index tumbling to 91.5 in July from 106.1 in June.
The percentage of consumers expecting business conditions will improve over the next six months fell to 31.6 percent from 42.4 percent, while those expecting conditions will worsen climbed to 19.3 percent from 15.2 percent.
Consumers also had a less favorable outlook for the labor market, as those expecting more jobs in the months ahead declined to 30.6 percent from 38.4 percent and those anticipating fewer jobs rose to 20.3 percent from 14.4 percent.
“Such uncertainty about the short-term future does not bode well for the recovery, nor for consumer spending,” said Lynn Franco, Senior Director of Economic Indicators at The Conference Board.
Meanwhile, the Conference Board said consumers’ assessment of present-day conditions improved in July, driving the present situation index up to 94.2 from 86.7 in the previous month.
The percentage of consumers claiming business conditions are “good” was relatively unchanged at 17.3 percent, while those claiming conditions are “bad” dipped to 39.1 percent from 42.5 percent.
Consumers’ appraisal of the job market was also more favorable, as the percentage saying jobs are “plentiful” edged up to 21.3 percent from 20.5 percent and those claiming jobs are “hard to get” fell to 20.0 percent from 23.3 percent.
On Friday, the University of Michigan is scheduled to release its revised reading on consumer sentiment in the month of July.
The consumer sentiment index for July is expected to be downwardly revised to 73.0 from the preliminary reading of 73.2, which was down from 78.1 in June.