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Last updated on April 23, 2014 at 11:01 EDT

U.S. consumer confidence eases in July

July 26, 2005

By Chris Reese

NEW YORK (Reuters) – U.S. consumer confidence eased in July
as gasoline prices surged and concern over job prospects
increased, although economists noted confidence remains
relatively strong.

“It was a little bit down but it doesn’t surprise me
because there has been a very strong correlation between
confidence and gasoline prices,” said Mark Vitner, senior
economist, Wachovia Securities, Charlotte, North Carolina.

The Conference Board’s consumer confidence index
unexpectedly fell to 103.2 in July from a revised 106.2 in
June. Consumers showed some concern about their job prospects,
with the “jobs-hard-to-get” index rising to 23.8 from a revised
22.5.

“Overall, confidence is still at a healthy level, up from
where it was a year ago, but we did pull back a bit from the
three-year high that we saw in June,” said Gary Thayer, chief
economist at A.G. Edwards and Sons in St. Louis, Missouri.

The increase in confidence over year-ago levels could be
seen in U.S. chain store sales, which grew in the latest week,
led by seasonal items like swimwear and air conditioners.

Sales rose 0.4 percent last week, compared with a 0.3
percent increase the previous week, the International Council
of Shopping Centers and UBS said in a joint report. It was the
fourth consecutive week of increases in chain store retail
sales.

Compared with the same week a year ago, sales grew 4.2
percent after a 4.0 percent rise the preceding week, ICSC and
UBS said.

Redbook Research, an independent company, said sales at
major retailers rose last week by 4.5 percent on a
year-over-year basis. Sales in July to-date were up 0.3 percent
compared with the same span in June.

“Hot weather is driving another healthy performance for
chain stores, who are still clearing out (successfully) summer
merchandise,” investment house RBS Greenwich Capital said in a
research note.

The dollar pared gains following the release of the
confidence index, while U.S. Treasury debt prices showed little
reaction, trading slightly mixed Tuesday afternoon.

Also on Tuesday, the Federal Reserve Bank of Richmond’s
monthly manufacturing and service index was minus 3 in July,
unchanged from June. The index draws from shipments, new orders
and employment in the District of Columbia, Maryland, Virginia,
North Carolina, South Carolina and most of West Virginia.