The Conference Board, a private research group, reported the Consumer Confidence Index dropped to 50.4 in July, down 3.9 points from the revised 54.3 in June. This follows last month’s drop of almost 10-points from 62.7 in May. This report is raising questions about the recovering economy and the back-to-school season. One part of the Consumer Confidence Index, which measures how people feel about the economy now, declined to 26.1, from 26.8. The other barometer, which measures outlook over the next six months, declined to 66.6, from 72.7 last month. The index had been recovering since hitting an all-time low of 25.3 in February 2009. Economists are concerned because consumer spending accounts for about 70 percent of U.S. economic activity and is critical to a strong recovery. A reading above 90 indicates the economy is on solid footing.

The Conference Board survey, which was mailed to 5,000 households from July 1 to July 21, showed the assessment of the job market was more negative than the previous month. Those claiming that jobs are “hard to get” increased to 45.8 from 43.5 percent, while those saying jobs are “plentiful” remained unchanged at 4.3 percent. Consumers are more negative about future job prospects with those expecting more jobs in the months ahead declining to 14.3 percent from 16.2 percent and those anticipating fewer jobs rose to 21.1 percent from 20.1 percent. The proportion of consumers expecting an increase in their incomes declined to 10 percent from 10.6 percent.

The Commerce Department reported the percentage of privately owned homes in the U.S. slid in the second quarter, but rental vacancies held steady. Many adults are no longer interested in owning a home and are perfectly happy just to rent, especially since many home owners lost equity in the recession. At Trulia.com about 30 percent of visitors are “crossover” home shoppers looking at both ownership and renting at the same time, says Tara-Nicholle Nelson, a Consumer Educator for the company. “This is very new,” Nelson says. “This represents a wholesale rethink of whether the American dream includes homeownership.” To help the “crossover” home shopper, Trulia publishes research on the “price-to-rent” ratio in major American cities, comparing the annual cost of ownership to the annual cost of renting comparable condos/townhomes and apartments. While consumers use factors aside from cost to make their decision, Nelson says, the index can give them an idea whether ownership and renting conditions are improving or worsening over time.

The current homeownership rate of roughly 67 percent could fall to 62 percent over the next two to three years, according to John Burns, Chief Executive Officer of John Burns Real Estate Consulting of Irvine, Calif. He estimates that six million of eight million American homeowners currently in default won’t be able to modify or otherwise resume paying their mortgages and will be forced to return to renting. “The wild card is government intervention,” Burns says. The ultimate homeownership rate could be affected by how the government addresses the role of government-controlled mortgage companies Fannie Mae or Freddie Mac. Burns says that his research indicates once consumers have seen the market behave the same way for three or four years straight, they assume it will stay that way forever. “When housing bubbles burst, homeowners think of real estate as a poor investment,” he says. “It may take awhile for this idea to work itself out of the collective psyche.”

The Commerce Department announced that orders for durable goods are down by 1.0% in June, the second straight monthly decline and the biggest drop in 10 months. Economists had been looking for a 1% gain. Junes’ decline in orders are consistent with other economic indicators signaling a slowdown in manufacturing in recent months. While the decline was mainly in transportation, there were also declines in electronics, metals, and machinery. Computers were the one increase.

Consumer bankruptcy filings jumped to 770,117 — 14% more in the first half of 2010 than in the same period last year according to the American Bankruptcy Institute. This is the highest point since 2005 when the Bankruptcy Abuse Prevention and Consumer Protection Act was enacted to curb the increase in filings five years ago. In June 2010 alone, filings were more than 8% higher than last year, according to the National Bankruptcy Research Center.

ABI expects another 1.6 million bankruptcy filings by the end of the year, Executive Director Samuel J. Gerdano said in a statement Friday.

The highest filing rates were found in the southwestern and southeastern regions of the country, with Nevada, who has the highest unemployment rate in the country, with more than double the national filing rate. Alaska, Washington, D.C. and South Carolina had the lowest filing rates — less than 40% of the national average.

The unemployment rate fell to 9.5 percent in June not because people went back to work, but because more than a half-million people gave up looking for work and were no longer counted as unemployed. The private sector added just 83,000 jobs for the month which is much fewer than the 200,000 new jobs needed each month to bring down the unemployment rate.

The fate of the economy will hinge on whether it can stand on its own. President Obama acknowledged the slow pace of the recovery and used the new job figures to argue for more stimulus spending and extended unemployment benefits. The loss reflected the end of 225,000 temporary jobs with the U.S. Census Bureau. Congress left on recess having failed to pass legislation that would have extended unemployment benefits for hundreds of thousands of Americans.

The Institute for Supply Management, a trade group of purchasing executives, said its index decreased 1.6 points in June to 53.8. The highest point since the recovery began was in May at 55.4. A reading higher than 50 indicates expansion. June’s reading is above the low of 37.2 reported in November 2008.

The index was broadened in January 2008 to consider four areas of information: business activity, employment, supplier deliveries and new orders. Before that, it only looked at business activity.

A robust service sector, which accounts for about 80 percent of U.S. employment, is crucial to keeping the economy expanding and adding jobs. Service-oriented jobs include those in hospitals, shops, restaurants, airlines, schools, banks and consulting firms, among others.

These businesses mainly depend on shoppers’ spending for revenue. Consumers have increased purchases only moderately, about 2 to 3 percent in the second quarter, said research firm Capital Economics. High unemployment, a still-rocky housing sector and volatile stock markets are weighing on people’s desire to spend.