By Vicki Needham - 08/31/10 03:45 PM EDT
Consumers' assessment of current conditions "was less favorable as employment concerns continue to weigh heavily on consumers," said Lynn Franco, director of The Conference Board Consumer Research Center, in a statement.
"Expectations about future business and labor market conditions have brightened somewhat, but overall, consumers remain apprehensive about the future."
Consumers anticipating an improvement in business conditions over the next six months also increased to 17 percent from 15.8 percent, while those anticipating conditions will worsen declined to 13.4 percent from 15.3 percent.
Consumers also were slightly less pessimistic about future employment prospects. Those expecting more jobs in the months ahead increased to 14.6 percent from 14.2 percent, while those anticipating fewer jobs decreased to 19.4 percent from 20.9 percent. The proportion of consumers expecting an increase in their incomes held steady at 10.6 percent.
Through the spring, the index showed three straight months of increases as the economy seemed to be building strength throughout several sectors. But economic news during the summer has raised concerns that the recovery is slowing.
The lack of job creation has left consumers wary of spending and more unsure about the future of the economy.
Despite that uncertainty, consumers spent more in July, as spending hit its highest level in four months as the demand for cars bolstered the numbers.
Spending rose at a 0.4 percent pace last month after three months of relatively flat spending, the Commerce Department reported Monday.
Consumer spending accounts for about 70 percent economic activity and is critical to a strong recovery.