Indicators Offer Mixed Economic Data

A batch of fresh data released on Tuesday offered more mixed signals about the state of the U.S. economy, as consumer confidence and a regional manufacturing index declined, but consumer spending increased at a faster-than-expected pace.

The Conference Board’s consumer confidence index, which had edged higher in June, slipped nearly 2.5 points to 116.5 in July.

The index is important because it is a measure of consumers’ feelings about the economy and their expectations of where it is headed.

Despite the Conference Board’s findings, the Commerce Department said that both consumer spending and incomes moved higher during June.

Because expectations and consumer demand drive the economy, any increase in spending will create additional demand for new factory goods and the trucking shipments that get them to stores. Consumer spending accounts for about two-thirds of the nation's economic activity.

Analysts attributed the drop off in consumer confidence to mounting job losses and dwindling optimism about the economy, the Associated Press reported.

In another report released on Tuesday, the National Association of Purchasing Management-Chicago said that its manufacturing index fell to 38.0 in July after coming in at 44.4 last month.

A reading below 50 signals a contracting economy, while a reading above 50 suggests expansion.

The NAPM-Chicago index, which shows that the sector is still struggling to shake off the softness, is important to trucking because manufacturing is one of its largest and most important customers.

ynn Franco, director of the Conference Board's Consumer Research Center said that drop in confidence signals slow economic growth ahead, as many analysts have predicted.

The consumer index, published by the Conference Board, is a monthly representative survey of 5,000 households.

Meanwhile, commerce reported a 0.4% rise in consumer spending in June to a $7.069 trillion annual rate. It was boosted by a 1.5% gain for durable goods -- items such as refrigerators and vehicles intended to last three or more years. Analysts were expecting only a 0.3% rise, according to Bloomberg.

Income growth, however, was slightly slower, increasing 0.3% to an $8.745 trillion rate.

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