U.S. consumer confidence showed slender gains in July but still reflected a "grim" assessment of economic conditions, the Conference Board reported July 29. The business research firm said its monthly index of consumer confidence edged up to 51.9% from a revised 51% in June, yet cautioned against reading too much into the gain.
The figure is about half the level of a year ago, reflecting steep declines in confidence as a result of a deep housing crisis and credit squeeze. It was somewhat better than the figure of 50% expected on Wall Street. "Consumers' assessment of current conditions was little changed, suggesting there has been no significant improvement, nor significant deterioration in, in business or labor market conditions," said Lynn Franco, the group's research director.
"Looking ahead, while consumers remain extremely grim about short-term prospects, the modest improvement in expectations, often a harbinger of economic times to come, bears careful watching over the next few months."
The revised June confidence reading of 51% marked a sharp rise from the prior estimate of 50.4%.
Slowing income growth, falling housing prices, rising unemployment, tighter credit and soaring food and energy costs and tighter lending standards have been weighing on consumer sentiment.
The Conference Board said its present situation index was nearly flat at 65.3% in July from 65.4% last month. The forward-looking expectations index, which hit an all-time low last month, edged up to 43% from 41.4%.
In response to questions about current conditions, consumers' assessment "remained quite bleak" in July, the Conference Board said. Consumers saying business conditions are "bad" increased slightly to 32.8% from 31.9% in June, while those claiming they are "good" rose to 13.1% from 11.5%.
They also grew increasingly pessimistic about the job market. Those claiming jobs are "hard to get" edged up to 30.3% from 29.7% in June, while those claiming jobs are "plentiful" declined to 13.5% from 14.1%.
However, the component on the labor market remained depressed and showed some rising concern. The percent of consumers expecting fewer jobs in the months ahead increased to 37.1% from 35.7%, while those anticipating more jobs remained virtually unchanged at 8.2%.
Consumers' outlook for the next six months slightly brightened from June but continued to be "very pessimistic." Those expecting business conditions to deteriorate eased to 32.4% from 33.5%, while those expecting conditions to improve edged up to 9.3% from 8.5% in June.
Copyright Agence France-Presse, 2008