Confidence among U.S. consumers declined more than forecast in July after reaching a five-year high a month earlier as Americans grew more pessimistic about the outlook for the economy and employment.
The Conference Board’s index of sentiment decreased to a reading of 80.3 from a revised 82.1 the prior month that was stronger than initially estimated, figures from the New York- based private research group showed today. The median forecast in a Bloomberg survey of economists was for a reading of 81.3.
Consumers’ views of the economy dimmed as Americans paid more at the gas pump this month than last and as higher mortgage rates threatened to slow momentum in the housing market. At the same time, increased wealth tied to higher property values and stock portfolios are helping sustain household spending.
“It reflects some of the volatility in financial markets over the last couple months, particularly the rise in interest rates,” Stephen Stanley, chief economist at Pierpont Securities LLC in Stamford, Connecticut, said before the report. “To the extent that you’re paying attention and seeing rates are rising, that’s bad news if you’re looking for a mortgage or a car loan.”
Stocks held gains after the figures, with the Standard & Poor’s 500 Index rising 0.3% to 1,690.48 at 10:15 a.m. in New York.
Estimates for consumer confidence ranged from 77 to 85.5 in the Bloomberg survey of 75 economists. The measure averaged 53.7 during the recession that ended in June 2009.
The Conference Board’s measure of expectations for the next six months decreased to 84.7 from 91.1. The gauge of present conditions improved to 73.6 this month from 68.7 in June.
The% of respondents expecting more jobs to become available in the next six months declined to 16.5 in July from 19.7 the previous month.
The share expecting incomes to increase fell to 15.3 this month from 15.9.
At the same time, more Americans said jobs were currently plentiful -- 12.2% in July compared with 11.3% a month earlier.
Buying plans also improved with more people indicating they intended to purchase homes, cars and appliances in the next six months.