WASHINGTON, July 26, 2011 (AFP) – US consumers have regained a bit of confidence this month despite a weak economy and a political stalemate in Washington over raising the US debt ceiling, data showed Tuesday.
The Conference Board said its July consumer confidence index rose to 59.5, 1.9 points higher than in June.
The rise, after two straight months of falling confidence, took analysts by surprise. The average estimate was for the index to drop to 56.0.
Most of the July increase was led by the expectations index that measures consumers’ outlook for the next six months.
That index rose to a reading of 75.4, while the index reflecting consumers’ assessment of current-day conditions weakened further in July, to 35.7, the lowest level since February.
Two years after the US economy official exited a severe recession, high unemployment and fire-sale home prices are keeping consumer confidence in the doldrums.
“Overall, consumers remain apprehensive about the future, but some of the concern expressed last month has abated,” said Lynn Franco, head of research at the Conference Board.
The depressed jobs market, where the unemployment rate rose to 9.2 percent in June, weighed on current expectations of finding a job. Those claiming jobs were “hard to get” rose to 44.1 percent from 43.2 percent, while those finding jobs “plentiful” remained unchanged at 5.1 percent.
Scott Hoyt at Moody’s Analytics noted the July gain had done little to reverse the cumulative 8.4-point decline in the index over the last two months.
“Concerns about the outlook come from multiple sources, including fears of further increases in gasoline prices, stock market volatility, uncertainty about fiscal policy centered on the debt-ceiling debate, falling house prices, and of course, the lack of stronger job gains,” he added.