After improving for the past two consecutive months, consumer confidence reversed course in July.
The Conference Board Consumer Confidence Index now stands at 90.9, down from the 99.8 seen last month. The index reached a 7.5-year high of 103.8 in January of this year.
"Consumer confidence declined sharply in July, following a gain in June. Consumers continue to assess current conditions favorably, but their short-term expectations deteriorated this month," said Lynn Franco, Director of Economic Indicators at The Conference Board. "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."
The Conference Board says that consumers' assessment of current conditions was somewhat less favorable in July. Those saying business conditions are "good" decreased from 26.1 percent to 24.2 percent. However, those claiming business conditions are "bad" was virtually unchanged at 17.9 percent.
Consumers were slightly less positive about the job market. Those stating jobs are "plentiful" decreased from 21.3 percent to 20.7 percent, while those claiming jobs are "hard to get" increased marginally from 26.1 percent to 26.7 percent.
Consumers' optimism about the short-term outlook decreased sharply in July. The percentage of consumers expecting business conditions to improve over the next six months declined from 17.9 percent to 14.7 percent, while those expecting business conditions to worsen rose slightly from 10.2 percent to 10.7 percent.
Despite the decline, Franco remains optimistic. "Overall, the Index remains at levels associated with an expanding economy and a relatively confident consumer," Franco added.
The monthly Consumer Confidence Survey, based on a probability-design random sample, is conducted for The Conference Board by Nielsen, a global provider of information and analytics around what consumers buy and watch.
Source: The Conference Board