Many of the factors contributing to the index , including personal finances and job satisfaction, were unchanged in July. However, there was marginal movement for a few elements. Expected layoffs fell, as the number of employees who believed their company had plans to cut staff in the coming months fell one point to 16 percent. There was also a one-point increase to 74 percent among employees not concerned about job security.

"The overall sense of stability we found this month is quite surprising," said Steve Wolfe, executive vice president, Hudson, North America. "It comes at a time when so many factors such as high energy prices, poor stock performance and escalating fighting overseas contribute to a sense of instability and a perceived softening of the economy. Yet, worker confidence does not appear to be affected by this."

The latest index, based on a national telephone survey of nearly 9,000 working Americans, is 1.8 points lower than last July's reading of 103.7. The main reason for the year-over-year decline is workers' perceptions of their financial situations. This July, only 38 percent believed their finances were improving, while 43 percent indicated they were getting worse. Those figures were 42 percent and 38 percent, respectively, at this time last year. Tempering that pessimism was a five-point jump to 74 percent in the number of employees not concerned about job loss.

Despite the overall stability, managers as a whole were less optimistic in July than the previous month due to less expected hiring activity and weakened confidence in finances. However, confidence rose among managers in the private sector, who reported significantly heightened levels of job satisfaction.