Job woes sap U.S. consumer confidence in July

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.

A woman shops at a Sam's Club store, a division of Wal-Mart Stores, in Bentonville, Arkansas, June 4, 2009. REUTERS/Jessica Rinaldi

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 worsening of sentiment came as Americans saying jobs were hard to get increased and those who thought jobs were plentiful fell to its lowest in more than a quarter century, hurting their overall assessment of the present situation.

All of this is bad news in the short term for an economy that has been heavily dependent on consumer spending in recent years.

“The U.S. consumer remains the weakest link in the very modest U.S. upswing, and another example of consumer vulnerability is evident in the second consecutive decline in consumer confidence,” said Alan Ruskin, chief international strategist, RBS Securities, Greenwich, Connecticut.

“The present situation continued to deteriorate, which together with the jobs plentiful and hard to get measures show closest coincident link to consumer spending.”

The “jobs hard to get” measure came in at 48.1 percent -- the highest since March this year -- compared with 44.8 percent the previous month.

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Those saying jobs are “plentiful” fell to 3.6 percent from 4.5 percent. That was the lowest number for that measure since February 1983, when it was 2.9 and the economy was still recovering from a particularly nasty recession in the early 1980s.

“People are getting a bit discouraged. Jobs are not coming as quickly as expected,” said John Silvia, chief economist at Wells Fargo in Charlotte, North Carolina.

“Consumer strength in the second half could be disappointing.”

The Present Situation Index declined to 23.4 from a revised 25.0, its lowest since March this year.

The Expectations Index also deteriorated, coming in at 62.0, its weakest since April, compared with 65.5 in June.

“Overall, consumers remain quite pessimistic about the short-term outlook,” the report said.

Additional reporting by Steven C. Johnson and Richard Leong, Editing by Chizu Nomiyama