New York Consumer confidence skidded in July, underscoring ongoing worries about jobs and the future of the U.S. economy, though consumer spending should continue to hold up, a private research group said Tuesday.
The New York-based Conference Board said that its Consumer Confidence Index fell to 116.5, down from a revised 118.9 in June. The latest reading came on the heels of a separate report that said consumer spending rose a better-than-expected 0.4 percent in June.
"Consumers are clearly becoming more concerned about the economy," said Mark Vitner, an economist at First Union Corp. "The biggest issue is probably concerns about their jobs because of all the layoffs we've seen in the news lately."
The unemployment rate has climbed from 3.9 percent in October to 4.5 percent in June.
Many economists expect the July jobless rate to rise to 4.7 percent. The government plans to release its employment report Friday.
"Consumers and businesses had viewed the current slowdown as nothing more than a bump in the road," Vitner said. "Now people are concerned it's a little more than that."
The Conference Board index, based on a monthly survey of 5,000 U.S. households, is considered a key indicator because consumer spending accounts for about two-thirds of the nation's economic activity. The index compares results to its base year, 1985, when it stood at 100.
Consumers have appeared relatively undaunted by weak corporate earnings, massive layoffs, slumping financial markets and anemic growth since the second half of last year.
Despite the July numbers, Lynn Franco, director of the Conference Board's Consumer Research Center, said the reading reflected cautious optimism among consumers that the economy would rebound later this year.