Ann Arbor Real Estate - Confidence increases slightly in July

By Greg Robb, MarketWatch



WASHINGTON (MarketWatch) -- The mood of U.S. consumers improved slightly in July, the Conference Board said Tuesday.

The consumer confidence index rose moderately to 106.5 in July from a revised 105.4 in June. Read full survey.

The rise was unexpected. Economists had forecast the index to slip to 103.9 from the initial June reading of 105.7, according to a survey conducted by MarketWatch. See Economic Calendar.

Stocks bounced higher initially to the jump in confidence, but the gains were not sustained. There was little reaction in foreign-exchange trading. Read Market Snapshot.

The longer-term trends in consumer confidence were little changed in July.
Confidence has been strengthening slowly since 2004. Most of the strength has been in the present conditions component.

"Present day conditions remain favorable, though not as strong as earlier this year. Expectations for the months ahead remain cautious and also below levels earlier this year," said Lynn Franco, director of the Conference Board consumer research center.
In July, the present situation index rose to 133.0 from 132.2 in June. This is still below the 136.2 level in April.

The expectation component has remained consistent with fairly tepid consumer spending, economists said.

In July, the expectations index edged up to 88.8 from 87.5. This is also below April's level of 92.3.

Consumers claiming conditions are "good" increased to 27.6% from 26.6%. However, those claiming conditions are "bad" increased to 15.5% from 15%.

The outlook for the labor market was little changed in July.

Consumers saying jobs are "hard to get" remained steady at 19.9%. Consumers saying jobs are "plentiful" rose to 28.6% from 28% in June.

Expectations of longer-term inflation held steady in July.

The index for inflation in 12 months remained at 5.1 in July from June.


In a separate report, the National Association of Realtors said that existing home sales fell 1.3% in June and inventories rose to a 9-year high.