The Conference Board said Tuesday its Consumer Confidence Index fell to 103.2 from a revised 106.2 in June. The July figure was worse than the 106.2 analysts expected.
In May, the index rose to 103.1 from April's 97.5.
Lynn Franco, director of the private research group's Consumer Research Center, said the dip was "no cause for concern."
"The overall state of the economy remains healthy and consumers' outlook suggests no storm clouds on the short-term horizon," Franco said in a statement. "Even the steady upward tick of fuel prices at the pump has done relatively little to dampen consumers' spirits. Yet, while there is little to suggest a downturn in activity, there is also little to suggest a pickup."
One component of the consumer confidence report, which looks at consumers' views of the current economic situation, fell to 118.5 from 120.8. Another component, the Expectations Index, which measures consumers' outlook over the next six months, declined to 93.0 percent from 96.4 in June.
The Conference Board's gauges are derived from responses received through July 19 to a survey mailed to 5,000 households in a consumer research panel. The figures released Tuesday include responses from at least 2,500 households.
The outlook for the labor market was mixed. The number of consumers expecting more jobs to become available in the coming months edged up to 15.8 percent from 15.4 percent, while those expecting fewer jobs moved up to 16.8 percent from 16.4 percent in June. The proportion of consumers anticipating their incomes will increase in the months ahead declined to 18.6 percent from 19.9 percent.
Consumers' overall assessment of ongoing conditions was somewhat mixed in July. The number of those claiming business conditions are "bad" increased to 16.9 percent from 15.3 percent. However, those saying conditions are "good" improved to 28.7 percent from 26.7 percent.
The employment picture was also mixed. Consumers saying jobs are "hard to get" rose to 23.8 percent from 22.5 percent, but those claiming jobs are "plentiful" remained at 22.5 percent.
Consumers' outlook for the next six months was marginally less favorable than in June. Those expecting business conditions to improve fell to 17.6 percent from 19.5 percent. Consumers anticipating that business conditions will worsen edged up to 9.6 percent from 9.0 percent.