WASHINGTON U.S. consumer confidence increased to a two-year high in July amid continued optimism about the labor market, though worries about a recession persisted, a survey showed on Tuesday.

The Conference Board said its consumer confidence index rose to 117 this month, the highest reading since July 2021, from 110.1 in June. Economists polled by Reuters had expected the index to increase to 111.8.

"Headline confidence appears to have broken out of the sideways trend that prevailed for much of the last year," said Dana Peterson, the Conference Board's chief economist. "Greater confidence was evident across all age groups, and among both consumers earning incomes less than $50,000 and those making more than $100,000."

Consumers' perceptions of the likelihood of a recession over the next 12 month ticked up, but remained below the recent peak earlier in the year. About 70.6% of consumers this month said a recession was "somewhat" or "very likely," up from 69.9% in June.

(Reporting by Lucia Mutikani; Editing by Paul Simao)