INSTANT VIEW: Consumer sentiment slips in July

NEW YORK (Reuters) - U.S. consumer sentiment soured in early July, slipping to its weakest since March, when confidence in the financial sector and economy were at a low ebb, the Reuters/University of Michigan Surveys of Consumers

survey showed on Friday.

KEY POINTS: * The Reuters/University of Michigan Surveys of Consumers said its preliminary index of confidence for July fell to a reading of 64.6 from the final reading for June of 70.8. * July's preliminary reading was well below economists' median forecast for 70.5. The index of consumer expectations fell to 60.9 from June's final reading of 69.2. * The index of current economic conditions slipped to 70.4 from June's final reading of 73.2. * Consumers' escalating concerns about an extended economic downturn, job security and erosion of wealth were the main factors depressing sentiment, the survey showed.

COMMENTS:

JOHN RYDING, CHIEF ECONOMIST RDQ ECONOMICS, NEW YORK

"We thought that it would pull back a little bit. University of Michigan, on the expectations side, has been seen as reasonably influenced by equity price moves. Having had a good quarter, equities are down so far in July so we thought that would be a little bit of a subtraction.

"People have seen higher prices at the gas pump of late so we thought that also would be a drag. And we still think the labor market is a little troublesome for consumers.

"Having had a good run-up, we were looking for confidence to pull back and it pulled back somewhat more than we expected.

"I don't think that derails the recession-ending story. We think the recession came to an end in the second quarter but it is a little bit of a question mark on the part of consumers and we're just going to have to see how that plays out."