Consumer confidence improved slightly in early August thanks to a drop in gasoline prices, but worries about a recession still weighed heavily on consumers' minds, according to a survey released on Friday.
The Reuters/University of Michigan Surveys of Consumers said its index of consumer confidence edged up to 61.7 in early August from 61.2 in late July. It fell short of economists' median forecast of 62.0, according to a recent Reuters poll.
The gauge looked ominous for the U.S. economy, which is dependent on consumer spending and currently in a fragile state. Consumers have already been struggling for months from the fallout of a persistent housing slump and tight credit.
"There is little doubt among consumers about the likelihood of a recession,'' Richard Curtin, director of the surveys, said in a statement.
This grim outlook led to a drop in the report's current conditions index to 69.3 in early August from 73.1 in late July and a forecast 73.2. The August reading was the second lowest since 1980 with the lowest set in June.
The report's expectations index, however, rose to 56.8 from 53.5 in late July. Analysts had expected a figure of 53.9. A silver lining in the latest survey was a drop in consumers' inflation expectations in the next 12 months.
The one-year inflation expectations gauge slipped to 4.8 from July's 5.1 percent, which was the biggest one-month drop since September 2006.
The index on five-year inflation expectations held steady at 3.2 percent.