WASHINGTON, July 29, 2008 (AFP) - US consumer confidence showed slender gains in July but still reflected a 'grim' assessment of economic conditions, the Conference Board reported Tuesday.

The business research firm said its monthly index of consumer confidence edged up to 51.9 percent from a revised 51.0 in June, but cautioned against reading too much into the gain.

The figure is about half the level of a year ago, reflecting steep declines in confidence as a result of a deep housing crisis and credit squeeze. But it was somewhat better than the figure of 50 percent expected on Wall Street.

'Consumers' assessment of current conditions was little changed, suggesting there has been no significant improvement, nor significant deterioration in, in business or labor market conditions,' said Lynn Franco, the group's research director.

'Looking ahead, while consumers remain extremely grim about short-term prospects, the modest improvement in expectations, often a harbinger of economic times to come, bears careful watching over the next few months.'

The revised June confidence reading of 51.0 percent marked a sharp rise from the prior estimate of 50.4 percent.

The group's present situation index was nearly unchanged at 65.3 percent from 65.4 last month. The forward-looking expectations index, which hit an all-time low last month, edged up to 43.0 percent from 41.4.

Confidence is tracked as a gauge for consumer spending, which accounts for two-thirds of US economy activity.