The U.S. consumer confidence declined in July to the lowest level this year after hitting a 4.5- year high in May, as the labor market showed no improving signs, a leading industry report revealed on Friday.

The index of U.S. consumer confidence dipped to 72 in July from 73.2 last month, according to the preliminary reading of the Thomson Reuters/University of Michigan's index of consumer sentiment. The fresh figure was less than the average forecast of 73.5.

The decline in July was the second in the past ten months. The index averaged 64.2 during the last recession and 89 in the five years leading up to the recession that began in December 2007 and ended in June 2009.

The index gauging consumer expectations for six months from now, which more closely projects the direction of consumer spending, eased to 64.8, also the lowest this year.

The index of current conditions, reflecting Americans' perceptions of their financial situation and whether they consider it a good time to buy big-ticket items like cars, rose to 83.2 from 81.5 in the previous month.

The U.S. corporate hiring in the past quarter was the weakest in two years. Economists say that sluggish hiring, along with stock market volatility tied to European debt crisis, has threatened to restrain the household spending.

In addition, U.S. consumers expect an inflation rate of 2.8 percent over the next 12 months, down from 3.1 percent in June.

It is widely believed that U.S. economy recovery will heavily rely on the rebounding of consumer spending, which accounts for about 70 percent of the overall economic activity.