INSTANT VIEW: Difficult jobs market hurts consumer confidence

NEW YORK (Reuters) - U.S. consumer confidence fell more than expected in July, the Conference board said on Tuesday, recording its second consecutive decline as sentiment remained hampered by a difficult job market.

KEY POINTS: * The Conference Board, an industry group, said its index of consumer attitudes slid to 46.6 in July from 49.3 in June. Economists had expected a reading of 49.0, based on the median of 64 forecasts in a Reuters poll. * The Present Situation Index declined to 23.4 from a revised 25.0, its lowest since March this year. * "The decline in the Present Situation Index was caused primarily by a worsening job market as the percent of consumers claiming jobs are hard to get rose sharply," the report said. * The Expectations Index also deteriorated, coming in at 62.0, its weakest since April, from 65.5 in June. * The worsening of sentiment came as Americans saying jobs are "hard to get" increased, with that measure coming in at 48.1 percent -- the highest since March this year -- from 44.8 percent the previous month. * Those saying jobs are "plentiful" fell to 3.6 percent from 4.5 percent. That was the lowest jobs plentiful number since

February 1983, when it was 2.9.

COMMENTS:

WILLIAM CHENEY, CHIEF ECONOMIST, JOHN HANCOCK FUNDS, PORTSMOUTH, NEW HAMPSHIRE:

"The number isn't totally surprising because we already had the consumer sentiment numbers, which were down too. It's a little surprising because gas prices have come down, something that generally boosts confidence.

"Although economists are seeing things start to turn around, the fact is that unemployment is still rising and the economy has been shrinking all throughout second quarter. It's not illogical that people would feel bad. The truth is, the end of the recession is its absolute trough, the economy at its worst possible state."

CARY LEAHEY, ECONOMIST, DECISION ECONOMICS, NEW YORK:

"The Conference Board consumer confidence survey is heavily influenced by the labor market so the nearly three-point drop is a little bit of an eyebrow-raiser because it might suggest that the slower pace of decline that many people expect for July nonfarm payrolls might not develop. The perception people have of the labor market is still pretty negative and this is tied to the notion of a jobless recovery. There may be very little, if any, net job creation in this recovery."

JOSH STILES, BOND STRATEGIST, IDEAGLOBAL, NEW YORK:

"There are two ways of looking at it -- what does it really mean and what is the market making of it? It seems to have had some market impact today but I think when we get the next round of consumer confidence we are going to see some improvement just from the stronger stock market and some of the better data we have had recently. The next round, with home prices doing a little better month-over-month in several measures and with the stock market rally, consumer confidence will probably uptick. So I wouldn't place too much on this. What I would really like to see when it comes to the consumer is more narrowing of the job losses and then have the labor market turn positive, maybe by next year."

TODD LEONE, HEAD OF LISTED TRADING, COWEN & CO., NEW YORK:

"Basically, the markets are moving off here a little bit, we had such a big move in the markets. It doesn't mean a heck of a lot -- it's usually a lagging indicator also. Down a little bit, which is fine. We had a great number yesterday in the housing sales, which might help out next month with consumer confidence because it's a little bit behind. The market's had a great run, we kind of held in there yesterday and it seems like we're a little bit heavy today for some reason.:

STEVE GOLDMAN, MARKET STRATEGIST, WEEDEN & CO, GREENWICH, CONNECTICUT:

"We're not seeing confirmation from consumer confidence, so it's a slight disappointment for the markets. Also the fact that we've had such an enormous run to new recovery highs, we're looking for an excuse to catch our breadth. Overall I think stocks will be supported on modest pullbacks. There is still a great deal of momentum so even if stocks could be considered overbought, its a type of a momentum where usually you'll see shallow retracement and stocks still poised to move higher."

BORIS SCHLOSSBERG, DIRECTOR OF FX RESEARCH, GFT, NEW YORK:

"Consumers are feeling no love in this recovery. The University of Michigan was also down so we kind of expected this sentiment index to be lower as well. All this suggests is that the critical assumption by the recovery bulls -- that consumption will come back as the recovery takes hold -- is faulty. Consumers are still concerned about the labor market and their own security. That's why euro/dollar reversed and the pound fell. Unless and until we get materially better fundamental data going forward, I think it's going to be difficult for the euro and pound and the other risk currencies to get above their key resistance levels."

BRIAN KIM, CURRENCY STRATEGIST, UBS, STAMFORD, CONNECTICUT:

"Case-Shiller was positive, with the metrics suggesting a possible recovery in housing. But we've seen some rolling over in the euro/dollar with some people returning to dollars because consumer confidence was a bit disappointing.

"But we're still in the range we've been seeing all summer. A lot of people are still waiting for a potential downside but are being dragged into trades because they missed the initial moves and need to put money to work. But fundamentally, there's cause for concern even though some of the data has been better. And if markets stumble, people will go back to the dollar and yen."

ERIC KUBY, CHIEF INVESTMENT OFFICER, NORTH STAR INVESTMENT MANAGEMENT CORP, CHICAGO:

"My sense is that its a relatively modest decline, and that the focus this week continues to be on corporate earnings and the improving real estate data. The Case-Shiller data this morning as another sign that the real estate market is getting better, though slowly. Since that's what contributed to the downturn, it's significant that that market has bottomed and is beginning to improve."

JOHN SILVIA, CHIEF ECONOMIST, WELLS FARGO, CHARLOTTE, NORTH CAROLINA:

"People are getting a bit discouraged. Jobs are not coming as quickly as expected. It suggests that back-to-school spending might be less than what people had intended. Consumer strength in the second half could be disappointing. This won't be a V-shaped recovery for either the economy and the jobs market."

MARKET REACTION: STOCKS: U.S. stock indexes weakened. BONDS: U.S. Treasury debt prices rose slightly. DOLLAR: U.S. dollar rose against the euro, but fell against the yen.