Consumer confidence fell moderately in July following a larger decline in June, according to The Conference Board Consumer Confidence Index, released today.
It marked the third consecutive month of declines in the index, which now stands at a level of 95.7, down from 98.4 in June.
The decrease was driven primarily by a decline in the Present Situation Index. The Expectations Index held relatively steady, but remained well below a reading of 80, suggesting recession risks persist, said Lynn Franco, senior director of economic indicators at The Conference Board.
“Looking ahead, inflation and additional rate hikes are likely to continue posing strong headwinds for consumer spending and economic growth over the next six months,” Franco said.
Inflation and surging gas and food prices remained top concerns for consumers and weakened their expectations, Franco noted. Meanwhile, purchasing intentions for cars, homes, and major appliances have softened further in July.
- Consumers’ appraisal of current business conditions was less favorable in July. 17.0% of consumers said business conditions were “good,” down from 19.5% in June. However, 24.0% of consumers said business conditions were “bad,” up from 22.8%.
- Consumers’ assessment of the labor market was less optimistic: 50.1% of consumers said jobs were “plentiful,” down from 51.5% in June, and 12.3% of consumers said jobs were “hard to get,” up from 11.6%.
- Consumers’ optimism about the short-term business conditions outlook was mixed in July; 14.0% of consumers expect business conditions will improve, down from 14.6% in June. Conversely, 27.2% expect business conditions to worsen, down from 29.7%.
- Consumers’ optimism about the short-term labor market outlook was also mixed;15.7% of consumers expect more jobs to be available, down from 15.9% in June. However, 21.4% anticipate fewer jobs, down from 22.2%.
- Consumers were more pessimistic about their short-term financial prospects. The index found 14.7% of consumers expect their incomes to increase, down from 16.1% in June, while 15.7% expect their income to decrease, up from 15.3%.