The consumer confidence index gained to 65.9 in July from an upwardly revised 62.7 last month, The Conference Board reported Tuesday.
The June index was originally reported as 62.0.
The present situation index slid to 46.2 from an unrevised 46.6, while the expectations index rose to 79.1 from an upwardly revised 73.4, originally reported as 72.3.
Economists polled by Thomson Reuters predicted a 61.5 reading for the index.
"Despite this month's improvement in confidence, the overall index remains at historically low levels," said Lynn Franco, director of The Conference Board's Consumer Research Center. "Consumers' attitudes regarding current conditions were little changed in July, but their short-term expectations, which had declined last month, bounced back. However, while consumers expressed greater optimism about short-term business and employment prospects, they have grown more pessimistic about their earnings. Given the current economic environment - in particular the weak labor market - consumer confidence is not likely to gain any significant momentum in the coming months."
Business conditions were called "good" by 13.8% of respondents in July, down from 14.2% in June. Those saying conditions are "bad" slid to 34.2% from 35.9%.
The percentage of consumers expecting a pickup in business conditions in the next half year rose to 18.9% from 16.0%, while 14.6% said they expect conditions to worsen, off from 15.8% the prior month.
On the jobs front, those who believe jobs are "plentiful" fell to 7.8% in July from 8.3% in June, while the number saying jobs are "hard to get" decreased to 40.8% this survey from 41.2%. The respondents who see fewer jobs becoming available in a half year, decreased to 20.3% from 20.8%. Those expecting more jobs to become available jumped to 17.6% from 14.8%, The Conference Board reported.
Income expectations were mixed, with 14.2% of consumers anticipating an increase in their income in the next six months, down from the prior month's 15.3%, while 14.8% expect their income to decrease, off from 15.1% in the prior month's survey.
The number of consumers who expected to buy a home in the next six months fell to 4.3% from 5.3%, while the number of respondents planning to buy a car increased to 13.7% from 11.6%. More consumers than last month said they plan to buy a major appliance in the next six months (48.3% vs. 47.0%).
Fewer respondents than last month (41.9% vs. 43.0%) expect to take a vacation in the next six months, but more said they would stay in the U.S. rather than leave the country. Cars rather than airplanes were the preferred mode of travel, by a 22.6%-22.3% margin.
The consumer confidence survey is based on a probability design random sample by the Nielsen Company.