NEW YORK – Two years into the recovery, Americans' confidence in the economy continues its rollercoaster ride.
As their short-term outlook on jobs and income eased somewhat amid a mix of optimistic and bad economic news, U.S. consumers' confidence rose slightly to 59.5 in July, according to a survey released Tuesday by a private research group.
That's up from a revised 57.6 in June __ which marked a seven-month low in the measure __ but still well below the reading of 90 that signals a healthy economy on the Conference Board's Consumer Confidence Index. It hasn't approached that level since the recession began in December 2007.
Brian Reardon, a 29-year-old insurance consultant from New York, says there's a reason consumers aren't confident. He's been cutting back on spending because all the recent unemployment and housing data has been mixed, making him uneasy about the economy.
"One day its good news," he says, "and the next day you hear some company is downsizing."
Economists carefully monitor consumer confidence because consumer spending accounts for 70 percent of economic activity. But consumer confidence has changed like the wind during the economic recovery, fluctuating up and down as consumers react to the stock markets, corporate news and world events. And while confidence had rebounded by now during the last recession __ which ended in 2001__ it remains shaky two years into the current recovery.
Earlier in the year on the index, which measures how Americans feel about business conditions, the job market and the next six months, Americans were more optimistic that the economy was on track for a recovery. But consumer confidence has fallen since reaching a three-year high in February of 72. A shift of less than five points is generally discarded by economists as insignificant.
"Overall, consumers remain apprehensive about the future, but some of the concern expressed last month has abated," said Lynn Franco, director of The Conference Board Consumer Research Center.
Even the data of different consumer confidence surveys don't agree on just how concerned Americans' are. Last week, for instance, a Thomson Reuters/University of Michigan survey that also tracks consumer confidence showed the measure fell in July to its lowest level in more than two years.
Paul Dales, senior U.S. economist with Capital Economics., said the increase in Consumer Confidence Index this month is "a bit bizarre given that all the other measures of confidence have recently fallen."
"Nonetheless, it remains at a level consistent with only modest consumption growth," Dales said.
The Consumer Confidence Index reading is "a reflection that Americans are coping with their circumstances and hoping it doesn't get any worse," said C. Britt Beemer, chairman of America's Research Group.
The weak job market, for one, has weighed on consumers. The economy added only 18,000 net jobs in June, which was the second straight month of scant hiring. The unemployment rate rose to 9.2 percent, the highest this year. That's far below the average job gains of 215,000 per month in the February-April period.
"The employment outlook doesn't look good and household net worth has not surpassed its previous peak and it won't anytime soon," said Chris G. Christopher, Jr., senior principal economist IHS Global Insight.
Besides job woes, there's a choppy housing market. A report out Tuesday showed home prices in major U.S. cities rose for the second straight month in May, propped up by an annual flurry of spring buyers. But after adjusting for such seasonal factors, prices fell in a majority of markets.
The Standard & Poor's/Case-Shiller home-price index showed that prices rose in 16 of the 20 cities tracked. Still, 19 of the 20 cities have seen year-over-year price declines.
Meanwhile, gas prices remain high, at $3.69 per gallon (3.8 liters), according to AAA, Wright Express and the Oil Price Information Service. That's about 14 cents more for a gallon of gas over the July Fourth weekend and nearly $1 more than a year ago.
And household budgets are being stretched by high food prices. Clothing prices are expected to go up this fall as retailers face higher labor costs in China and soaring prices of raw materials like cotton.
The Conference Board survey, conducted by The Nielsen Co., is based on a random survey mailed to approximately 3,000 households from July 1 through July 14. Survey numbers are updated after the month ends.
Associated Press Writer Joseph Pisani contributed to this report.
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