NEW YORK-After four straight months of declines, the consumer confidence index gained ground in July, moving up 3.2 points to 65.9.
Lynn Franco, director of the Consumer Research Center of The Conference Board, which provides the monthly index, attributed the increase to a pickup in consumers’ attitudes about the economy’s short-term outlook. Indeed, the expectations index, the component of the main index that measures the down-the-road economic outlook, rose 5.7 points to 79.1. This offset a decline of 0.4 point in the present situation index, which finished July at 46.2.
Nevertheless, the gain in optimism is somewhat tepid, according to Franco. “Despite this month’s improvement in confidence, the overall index remains at historically low levels,” she said. She noted consumers’ concerns about their earnings, which have prevailed in spite of a more positive outlook for the business and employment situations.
Indeed, the percentage of consumers who expected an increase in their incomes declined in July, while the percentages of those expecting business and employment conditions to improve headed upward. At the same time, consumers’ appraisals of current conditions in business and employment were marginally worse than they were in June.
“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.