Confidence among U.S. consumers fell more than forecast in July, reinforcing concern that mounting joblessness will hurt households, Bloomberg reported after the release of a report by the Conference Board.

The Conference Board’s confidence index dropped to 46.6, a second consecutive decline, following a reading of 49.3 in June. The figure reached a record low of 25.3 in February.

Unemployment is projected to top 10 percent by early 2010, which will erode buying power and prompt Americans to save more. Consumer spending, which accounts for 70 percent of the economy, is projected to be slow to rebound, restraining any recovery from the worst recession in five decades.

“We have a consumer that’s still struggling,” Scott Brown, chief economist at Raymond James & Associates Inc. in St. Petersburg, Fla., told Bloomberg. “Consumer spending will be soft, and the recovery is likely to be modest. We do need to see the job losses moderate.”

Consumer confidence was projected to drop to 49, according to the median estimate in a Bloomberg News survey of 67 economists. Forecasts ranged from 44 to 56. The index averaged 57.95 last year.

Economists say the Conference Board’s index tends to be heavily influenced by attitudes about the labor market.

The economy has lost 6.5 million jobs since the recession began in December 2007, making it the biggest employment slump of any downturn in the last eight decades.

Economists surveyed by Bloomberg predict the unemployment rate will exceed 10 percent by the first quarter of next year, rising from 9.5 percent in June, the highest level since 1983.

Company results indicate households are being frugal, even with spending on food. PepsiCo Inc., the world’s largest snack maker, said second-quarter profit fell as consumers favored less-expensive drinks.