Consumer sentiment cools again in early July

NEW YORK Fri Jul 13, 2012 10:28am EDT

A shopper walks down an aisle in a newly opened Walmart Neighborhood Market in Chicago in this September 21, 2011 file photo. REUTERS/Jim Young/Files

A shopper walks down an aisle in a newly opened Walmart Neighborhood Market in Chicago in this September 21, 2011 file photo.

Credit: Reuters/Jim Young/Files

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NEW YORK (Reuters) - U.S. consumer sentiment cooled again in early July to its lowest level in seven months as Americans took a dim view of their finances and job prospects, a survey released on Friday showed.

The Thomson Reuters/University of Michigan's preliminary reading on the overall index on consumer sentiment fell to 72.0 from 73.2 in June, frustrating economists' expectations for a slight gain to 73.4.

It was the lowest level since December 2011.

Only 19 percent of consumers expected to be financially better off in the coming year, the lowest proportion recorded by the survey. Americans were also gloomy about their longer-term prospects with 39 percent anticipating their situation would be better in five years.

"The greatest concern to consumers is that wage and job growth will remain depressed over the foreseeable future, and that these meager gains are likely to be further diminished in the years ahead by rising taxes and benefit cutbacks," survey director Richard Curtin said in a statement.

The gauge of consumer expectations slipped to 64.8 from 67.8, also the lowest since last December.

While there was widespread recognition of an economic slowdown, that did not have a large impact on consumers' economic outlook, and the barometer of current economic conditions rose to 83.2 from 81.5.

News of job losses was mentioned twice as frequently as job gains, the opposite of what was seen in the first six months of the year.

Americans' buying plans improved with the measure of buying conditions for vehicles and household durables rising to 131 from 125.

The one-year inflation expectation fell to its lowest level since October 2010 at 2.8 percent from 3.1 percent. The five-to-10-year inflation outlook held steady at 2.8 percent.

(Reporting by Leah Schnurr; Editing by Chizu Nomiyama)

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Comments (3)
greedometer wrote:
Judging by the immediate response from the US stock market, a lot of shorts just covered and drove the market higher. But on thin volume. Another risk-on rally that is faith-based –that QE3 will be launched. Good luck with that. greedometer

Jul 13, 2012 10:34am EDT  --  Report as abuse
greedometer wrote:
Judging by the immediate response from the US stock market, a lot of shorts just covered and drove the market higher. But on thin volume. Another risk-on rally that is faith-based –that QE3 will be launched. Good luck with that. greedometer

Jul 13, 2012 10:34am EDT  --  Report as abuse
Jeepgirl wrote:
With the deficit running almost $16 trillion dollars and the government advertising for people to sign up for food stamps as well as giving cell phones to people classified as poor and looking for a job, it is kind of hard to be optimistic in the market. I also forgot to mention the additional taxes that Obamacare will put in place.

Jul 13, 2012 12:01pm EDT  --  Report as abuse
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