The monthly Consumer Confidence Index, which uses 1985 as a base year with an assigned value of 100, fell from 54.3 in June to 50.4, the research group said.
Prior to June, the index had risen for three consecutive months.
In July, the monthly survey of 5,000 households found the number of respondents indicating economic conditions were "good" increased from 8.4 percent to 9 percent. However, the number of respondents indicating conditions were "bad" rose from 41 percent to 43.6 percent.
The percentage of respondents indicating jobs were "plentiful" was unchanged at 4.3 percent while the number indicating jobs were "hard to get" increased from 43.5 percent to 45.8 percent.
"Concerns about business conditions and the labor market are casting a dark cloud over consumers that is not likely to lift until the job market improves. Given consumers' heightened level of anxiety, along with their pessimistic income outlook and lackluster job growth, retailers are very likely to face a challenging back-to-school season," said Lynn Franco, director of the Conference Board Consumer Research Center.