The Conference Board, an industry group, said consumer attitudes worsened this month as did their expectations about jobs being hard to get.
The groups index of consumer attitudes fell to 50.4 in July from an upwardly revised 54.3 in June, below the median forecast of 51 in a Reuters poll.
There have been quite a few headwindsthe fiscal stimulus is fading, the European situation certainly did have an impact on consumer confidence and inventories are being brought more into line, said David Sloan, economist at 4Cast Ltd in New York. But clearly the big problem for consumers is jobs.
US Treasuries trimmed losses and stocks pared gains after the dim consumer confidence reading as investors bought safe government assets.
Concerns about business conditions and the labor market are casting a dark cloud over consumers that is not likely to lift until the job market improves, said Lynn Franco, Director of The Conference Board Consumer Research Centre. US single-family home prices rose more than expected in May, still reflecting robust spring sales spurred by now-expired homebuyer tax credits, Standard & Poors/Case Shiller home price indexes showed on Tuesday.