Consumers’ confidence levels were slightly more upbeat in July, but they remained pessimistic about their personal earnings against the backdrop of a weak labor front.
The Index rose to 65.9, up from 62.7 last month. The two components of the Index were mixed. The Expectations Index, which measures short-term outlook over the next six months, rose to 79.1 from 73.4. The Present Situation Index, dipped to 46.2 from 46.6 in June.
Lynn Franco, director of economic indicators at The Conference Board, said, “Despite this month’s improvement in confidence, the overall Index remains at historically low levels.”
She noted that “while consumers expressed greater optimism about short-term business and employment prospects, they have grown more pessimistic about their earnings. Given the current economic environment — in particular the weak labor market — consumer confidence is not likely to gain any significant momentum in the coming months.”
UBS chief economist Maury Harris said the average level for the first quarter is 67.5.
The percentage of consumers who expect business conditions to improve over the short term rose to 18.9 percent from 16 percent last month, but the proportion of respondents who expect an increase in their incomes fell to 14.2 percent from 15.3 percent, according to The Conference Board.
Respondents who said jobs presently were “hard to get” fell to 40.8 percent from 41.2 percent, while those who said jobs are “plentiful” also declined to 7.8 percent from 8.3 percent.
Coach Inc. put a damper on high-end fashion stocks today and led the sector down, falling 18.6 percent to $49.33 — the accessories giant’s second-worst drop on record.
Coach posted stronger fourth-quarter earnings, but said sales at its North American outlet store decelerated.
Also losing ground were Lululemon Athletica Inc., declining 5.4 percent to $56.48, and Tiffany & Co., losing 4 percent to $54.93.
The S&P Retail Index fell 1.8 percent, or 10.99 points, to 618.52 and the Dow Jones Industrial Average declined 0.5 percent, or 64.33 points, to 13,008.68.
All eyes today will be on the Federal Reserve as the central bank’s committee on monetary policy began a two-day meeting Tuesday. Investors are on the watch for some indication that the Fed will step in to help spur growth.
In Europe, markets closed down after unemployment in the euro zone hit a record high of 11.2 percent in June.
The FTSE 100 in London suffered the most, falling 1 percent to 5,635.28, followed by the CAC 40 in Paris, which sank 0.9 percent to 3,291.66. The FTSE MIB in Milan was down 0.6 percent to 13,890.99, while the DAX in Frankfurt sank 0.03 percent to 6,772.26.
The major decliners included Burberry Group, which sank 3.2 percent to 12.54 pounds, or $19.66, and Inditex, down 3.1 percent to 83.83 euros, or $103.12 at current exchange.
Earlier in the day, the major Asian indices fared better. Japan’s Nikkei 225 inched up 0.7 percent to 8,695.06, while Hong Kong’s Hang Seng Index rose 1.1 percent to 19,796.81.