Increasing financial troubles for consumers and a weak retail outlook persisted this month. Consumer sentiment remained in negative territory as a stagnant job market is keeping consumers cautious about spending, according to theConsumer Reports IndexJuly report.

The Consumer Sentiment Index, which measures how consumers are feeling financially when compared with a year ago, rose slightly to 48.5 from the previous month's index, but it continues to lag in negative territory. Senior citizens and households earning less than$50,000have the weakest consumer sentiment. Northeastern states had the most improved sentiment, but were still negative at 48.1.

"The economy is treading water and really hasn't shown any momentum toward recovery," saidEd Farrell, a director at Consumer Reports National Survey Research Center. "Consumers remain cautious, especially households with income less than$50,000, who have been hurt the worst and face the biggest stresses regarding jobs, unpaid bills, and health care access and affordability."

The Northeastern region saw the best improvements in July for theConsumer Reports Stress Index, while theConsumer Reports Trouble Tracker Index, which measures the depth and breadth of household financial difficulties, improved the most in the West. Southern states were the most optimistic, with aConsumer Reports Sentiment Indexof 51.1.

TheConsumer Reports Employment Indexshowed a job market that was decidedly stagnant, with approximately the same number of jobs being created and lost. OnJuly 8, the U.S. Bureau of Labor Statistics reported that the overall unemployment rate is 9.2% for June.

"The job market is one of the biggest impediments to an economic recovery, as it weighs on consumers and has a large overhang on the U.S. economy. Poor hiring depressed retail performance in June, and is also expected for the rest of July," Farrell said. "Last month's retail index was the weakest since October, and planned purchases are anemic compared with the past few months."

Nationwide, theConsumer Reports Trouble Trackershowed consumers were facing more money problems than the prior month, but the problems are not as severe as a year ago. July'sConsumer Reports Stress Indexfound that consumers have nearly the same degree of stress as they had the prior month.

TheConsumer Reports Indexreport, , comprises five key indices: theSentiment Index, theTrouble Tracker Index, theStress Index, theRetail Index, and theEmployment Index. Here are the key findings:

Consumer Reports Sentiment Index: 48.5*

• Consumer Reports Sentiment Indexwas up slightly from last month (46.2) and is comparable to one year ago at 45.2.
• The most optimistic consumers: age 18-34 at 62.2, and households with income of$100Kor more at 56.9. The most pessimistic consumers: households with income less than$50,000(44.2) and those who are age 65 and older (38.7).

* TheConsumer ReportsSentiment Indexcaptures respondents' attitudes regarding their financial situation, asking them if they are feeling better or worse off than a year ago. When the index is greater than 50, more consumers are feeling positive about their situation. When it is below 50, more consumers are feeling worse. TheSentiment Indexcan vary from a high of 100 to a low of 0.

Consumer Reports Trouble Tracker Index: 50.6*

• TheConsumer Reports Trouble Tracker Indexincreased to 50.6 in July from 48.6 in June, affected by missed payments on major bills and loan denials as the most significant changes. TheTrouble Tracker Indexis still down substantially from last year's 57.6.
• The financial difficulties that were on the rise in the past 30 days were led by missed payments on major bills at 8.7%, an increase from 7.1% in June.
• The number of people who reported missing a mortgage payment was 1.8%, down from last month's 2.7% and 2.4% a year ago.
• Overall, the most prevalent consumer trouble remains the inability to afford medical bills or medications at 13.3%, down from 14.0% last month.
• Lower-income households, earning less than$50,000a year, have been disproportionately affected. In the past 30 days: 21.4% unable to afford medical bills or medications; 16.0% missed payment on a major bill (not a mortgage); and, 9.3% lost or reduced health-care coverage.

* TheConsumer Reports Trouble Tracker Indexfocuses on both the proportion of consumers that have faced difficulties as well as the number of negative events they have encountered. The negative events include: the inability to pay medical bills or afford medication, missed mortgage payments, home foreclosure, interest-rate increase, penalty fees, reduced lines of credit or other changes in credit-card terms, job loss or layoffs, reduced health-care coverage or the denial of personal loans. TheConsumer Reports Trouble Tracker Indexis then calculated as the proportion of consumers that have experienced at least one of the negative events comprising the index multiplied by the average number of events encountered.

Consumer Reports Retail Index: Past 30-Day 10.2, Next 30-Day – 7.7*

• Consumer retail behavior is weak. TheConsumerReports Past 30-Day Retail Index*, reflecting June activity, is 10.2, down from 12.0 the prior month. TheConsumer Reports Next 30-Day Retail Index*, reflecting planned purchasing in July, is also down, 7.7 versus 9.0 the prior month.
• Looking in detail at the categories comprising theConsumer Reports Past 30-Day Retail Index, the month's softness was the result of declines in major and small appliances, down 1.7 percentage points to 7.7%, and down 5.2 percentage points to 15.9%, respectively.
• Among the retail categories not included in the index, past 30-day purchases, reflecting June activity, were flat for new cars (3.0% vs. 3.3%), while home purchasing was down slightly (1.9% vs. 2.5%). Used car purchases increased to 5.4% from 4.8%. Planned purchasing over the next 30 days, reflecting July activity across these categories, is projected to decrease for new and used cars and remain unchanged for purchases of homes versus the prior month.
• Among the retail categories not included in the index, past 30-day purchases, reflecting June activity, were flat for new cars (3.0% vs. 3.3%), while home purchasing was down slightly (1.9% vs. 2.5%). Used car purchases increased to 5.4% from 4.8%. Planned purchasing over the next 30 days, reflecting July activity across these categories, is projected to decrease for new and used cars and remain unchanged for purchases of homes versus the prior month.

* The Consumer Reports Retail Indexlooks at consumer purchases in the past 30 days as well as the outlook for planned purchases in the next 30 days across several categories. TheConsumer Reports Retail Indexrepresents the proportion of respondents that made a purchase in the following categories: major home appliances, small home appliances, major home electronics, personal electronics, and major yard and garden equipment. TheRetail Indexis a weighted calculation. For example, a major appliance is of greater value than a small appliance. Because of their size and frequency, car and home purchases are tracked separately.

Consumer Reports Employment Index: 50.8*

• TheConsumer Reports Employment Indexincreased fractionally to 50.8 from 50.0, a month ago. As part of an ongoing trend, the hardest hit consumers by the stagnantEmployment Indexwere those in households earning less than$50,000, who had the highest proportion of job losses. Overall in the past 30 days, 6.3% have started a new job, up from 5.3% a month earlier, and job losses were down slightly at 4.8% from the 5.4% reported the prior month.

* TheConsumer Reports Employment Indexexamines the change in employment of those that reported starting a new job versus those that have lost their job or were laid off in the past 30 days. An index below 50 indicates more jobs were lost than gained, while a score more than 50 indicates more jobs were gained than lost in the past 30 days.

Consumer Reports Stress Index: 59.4*

• The level of stress consumers feel they are under is comparable to June, when it stood at 59.9 and is down only slightly from one year ago 61.0. In this month'sConsumer Reports Stress Index, 38.3% of respondents were more stressed than a year ago, while only 19.5% were less stressed and 42.2% had about the same amount of stress.
• Over the past year, theConsumer Reports Stress Indexhas ranged from a low of 55.4 inJanuary 2011to a high of 63.2 inOctober 2010.