Consumer confidence slips in July amid concerns about grocery, fuel prices
Consumer confidence declined in July as consumers’ assessment of current business and labor-market conditions softened for the third consecutive month,
The Conference Board Consumer Confidence Index decreased by 1.4 points to 90.8 in July, down from an upwardly revised 92.2 in June. (The survey period for this month's preliminary results was July 1–22, encompassing ongoing conflict in the Middle East.)
The Present Situation Index — based on consumers' assessment of current business and labor market conditions — fell by 3.6 points to 114.9, its third consecutive monthly decline. The Expectations Index — based on consumers' short-term outlook for income, business, and labor market conditions — remained unchanged at 74.7.
"Consumer confidence moderated slightly in July, continuing a general downward sloping trajectory since late 2021," said Dana M Peterson, chief economist, The Conference Board. “Consumer appraisals of current business conditions and, to a lesser extent, perceptions of the current labor market both softened.”
Looking ahead, Peterson added, consumers anticipate little improvement in business conditions over the next six months, but expectations for the labor market were slightly less negative.
Consumers' write-in responses on factors affecting the economy continued to be mostly pessimistic in July. References to prices and oil and gas eased in frequency but remain elevated.
Comments about food and grocery prices increased. Mentions of war, geopolitics and conflict eased during the sample period. But the fighting has reaccelerated quite recently there could be an increase in these mentions in the revised data for July. Notably, references to jobs and unemployment picked up slightly.
Purchasing Plans
Home buying and auto purchasing expectations continued their upward trend on a six-month moving average basis. Among consumers' planned purchases of durable goods within six months, furniture and smartphones remained the most desired items, but expectations for smartphones moderated in July. Spending plans for TV sets, refrigerators, and washing machines rose on a six-month moving average basis.
Consumers planned to spend more on services over the next six months. Among all service categories, restaurants/bars/take-out, streaming/internet/mobile services, and beauty and personal care remained among the top three spending targets.
Beyond the top three, consumers anticipated spending more on many activities in the next six months, such as movies, hotels for personal travel, airfare, and amusement parks, and museums and historical sites. Overall travel intentions within six months perked up in July after easing for most of the year. Domestic travel plans recovered while foreign travel plans softened a bit.
Consumers' write-in responses on factors affecting the economy continued to be mostly pessimistic in July. References to prices and oil and gas eased in frequency but remain elevated.
Insights from the July report are below.
Present Situation
Consumers' views of current business conditions worsened in July.
•18.9% of consumers said business conditions were "good," down from 20.2% in June.
•17.8% said business conditions were "bad," up from 16.5%.
On net, consumers' views of the labor market continued to soften in July.
•24.6% of consumers said jobs were "plentiful," down from 25.5% in June.
•Conversely, 21.5% of consumers said jobs were "hard to get," down slightly from 21.7%.
Expectations Six Months Hence
Consumers were less optimistic about future business conditions in July.
•17.8% of consumers expected business conditions to improve, down from 18.9% in June.
•21.1% expected business conditions to worsen, up from 20.7%.
In July, consumers were less negative about the labor market outlook.
•16.7% of consumers expected more jobs to be available in July, up from 15.6% in June.
•Additionally, 25.3% anticipated fewer jobs, down slightly from 25.5%.
Consumers' outlook for their income prospects was somewhat less optimistic in July.
•20.3% of consumers expected their incomes to increase, down from 20.7% in June.
•13.0% expected their incomes to decline, up from 12.9%.
The monthly Consumer Confidence Survey, based on an online sample, is conducted for The Conference Board by Toluna. The cutoff date for the preliminary results was July 22.
The monthly Consumer Confidence Survey, based on an online sample, is conducted for The Conference Board by Toluna.