July 12 (Bloomberg) -- Consumer confidence stagnated last week as scant improvement in the labor market left Americans more discouraged about the economy.
The Bloomberg Consumer Comfort Index held at minus 37.5 in the week ended July 8. Some 86 percent of those surveyed said the economy was in bad shape, 21 percentage points higher than the average since 1985.
“Consumers remain generally downbeat about the economy and expectations for the future,” said Joseph Brusuelas, a senior economist at Bloomberg LP in New York. “Given slower job growth and the recent stabilization of oil and gasoline prices near current levels, there is little impetus to support an improvement in overall sentiment in the near term.”
Gasoline prices that are no longer falling along with the labor market’s worst quarterly performance since the first three months of 2010 risk stifling the consumer spending that accounts for 70 percent of the U.S. economy. Flagging sentiment stretches around the globe, according to a Pew Research Center report that showed Europe’s debt crisis is taking a toll.
The public mood about the economy has worsened since 2008 in eight of 15 countries providing comparable data, the Pew report said. Some 16 percent of Europeans said they believe their economy is doing well, the survey showed.
Stocks dropped, sending the Standard & Poor’s 500 Index lower for a sixth day, on growing concern about global economic growth and corporate earnings. The S&P 500 decreased 0.5 percent to 1,334.76 at the 4 p.m. close in New York.
Another report today showed fewer Americans than forecast filed first-time claims for unemployment benefits last week, reflecting the volatility of applications during the annual auto-plant retooling period.
Claims for jobless insurance declined 26,000 in the week ended July 7 to 350,000, the fewest since March 2008, the Labor Department said. Economists surveyed by Bloomberg projected 372,000 claims, according to the median projection.
“You can never take claims at face value because of the July shutdowns,” said Jonathan Basile, an economist at Credit Suisse in New York, who projected the number of applications would drop to 355,000. “We are in a period of uncertainty. This makes for a situation where businesses will hold off on taking risks regarding investment and payrolls.”
Prices of imported goods decreased more than forecast in June as declining energy costs curbed inflation, another Labor Department report showed. The 2.7 percent plunge in the import- price index was the biggest since December 2008 and followed a 1.2 percent drop in May. Prices excluding fuel fell 0.3 percent, the most in almost two years.