Consumers unexpectedly took a dimmer view of the U.S. economy this month. Householders were especially less optimistic about current and future job growth.
The Conference Board, a private research group, said Tuesday that its index of consumer confidence plunged to 90.9 in July from a revised 99.8 in June, first reported as 101.4.
The index stands at its lowest level since September 2014. Economists surveyed by The Wall Street Journal had forecast the latest index to drop but only to 100.0.
"Consumers continue to assess current conditions favorably, but their short-term expectations deteriorated this month," said Lynn Franco, director of economic indicators at the board. "A less optimistic outlook for the labor market, and perhaps the uncertainty and volatility in financial markets prompted by the situation in Greece and China, appears to have shaken consumers' confidence."
The present situation index, a gauge of consumers' assessment of current economic conditions fell to 107.4 from a revised 110.3 in June, originally put at 111.6. Consumer expectations for economic activity over the next six months plunged to 79.9 from a revised 92.8, originally reported as 94.6.
According to the board, consumers are less certain about the labor markets.
The board's survey found 20.7% of consumers this month think jobs are "plentiful," versus 21.3% who thought that in June. Another 26.7% describe jobs as "hard to get" this month, up from 26.1% saying that in June.
The share of respondents anticipating more jobs in the next six months fell to 13.1% in July from 17.1% in June. The share expecting fewer jobs jumped to 20.0% from 15.2%.
Consumers' perceptions about the labor markets could play into the Federal Reserve's thinking about the economy and interest rates. During testimony to Congress earlier this month, Fed Chairwoman Janet Yellen said "the labor market is getting demonstrably closer…to a more normal state."
The Fed starts a two-day meeting on Tuesday and will release a policy statement on Wednesday.
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