Consumer confidence rises above expectations in July

  • Consumer confidence rose in July after a disappointing drop in June.
  • The survey measures American's sentiment on current economic conditions and prospects for the next six months, including business and labor market conditions.
A customer browses goods at a Costco Wholesale store in New York.
Victor J. Blue | Bloomberg | Getty Images
A customer browses goods at a Costco Wholesale store in New York.

Consumer confidence gained more than expected in July, but consumers remained concerned about future economic growth.

The Confidence Board's index increased to 127.4 in July, beating an estimated 126.5 by Reuters economists. The index was up from a disappointing revised reading of 127.1 in June, sunken by lower income prospects.

Consumers reported better feelings toward the current economic situation; however, they were not optimistic about long-term growth.

"Consumers' assessment of present-day conditions improved, suggesting that economic growth is still strong," said Lynn Franco, director of economic indicators at The Conference Board. "However, while expectations continue to reflect optimism in the short-term economic outlook, back-to-back declines suggest consumers do not foresee growth accelerating."

But Steve Odland, president and CEO of The Conference Board, said the report is positive and while consumers don't expect major changes in either direction for the index, they do expect continued growth.

"A lot of this is tied to job creation," Odland, who is also a CNBC contributor, said Tuesday on "Power Lunch." The U.S. Department of Labor's next jobs report is due out on Friday.

Odland said a larger trade war could potentially derail the index, but noted that "from a trade perspective, consumers are kind of neutral on it. There are some that say, 'you know, this is an issue.' Most of them say it's not an issue. There's so much noise out there that the consumers are kind of numb to it. So it's not really impacting consumer confidence at this point."

The survey measures American's sentiment on current economic conditions and prospects for the next six months, including business and labor market conditions. Since consumer spending accounts for about 70 percent of U.S. economic activity, economists' pay close attention to the number.

— CNBC's Kellie Ell contributed to this report.