The Conference Board’s Consumer Confidence Index fell 1.4 points in July to 90.8.
Consumers’ assessment of current business and employment conditions declined for the third straight month.
Grocery prices, unemployment, and geopolitical conflicts remained important concerns, although inflation expectations eased.
American consumers became slightly less confident about the economy in July as their views of current business conditions and the job market continued to weaken.
The Conference Board’s Consumer Confidence Index declined to 90.8 in July, down 1.4 points from an upwardly revised 92.2 in June. The survey covered July 1 through July 22, a period that included continued conflict in the Middle East.
“Consumer confidence moderated slightly in July, continuing a general downward sloping trajectory since late 2021,” Dana Peterson, chief economist at The Conference Board, said in the organization’s July consumer confidence report.
The Present Situation Index, which measures consumers’ views of current business and labor market conditions, fell 3.6 points to 114.9. It was the third consecutive monthly decline.
The Expectations Index, which measures consumers’ six-month outlook for income, business conditions, and employment, held steady at 74.7. Readings below 80 have historically been associated with an increased risk of recession, according to The Conference Board.
Views of business and employment weaken
Only 18.9% of consumers described current business conditions as “good,” down from 20.2% in June. At the same time, 17.8% said conditions were “bad,” up from 16.5%.
Consumers also became less positive about the employment market. The percentage saying jobs were “plentiful” declined to 24.6% from 25.5%. However, the share saying jobs were “hard to get” edged down slightly, to 21.5% from 21.7%.
The outlook for the next six months was mixed. About 17.8% expected business conditions to improve, down from 18.9% in June, while 21.1% expected conditions to worsen.
Employment expectations improved modestly but remained negative overall. The percentage expecting more jobs rose to 16.7%, while 25.3% expected fewer jobs.
Consumers were also a little less optimistic about their paychecks. About 20.3% expected their incomes to increase, down from 20.7%, while 13% anticipated a decline.
Grocery prices remain a concern
Consumers’ written comments about the economy remained mostly pessimistic. References to overall prices and gasoline declined but stayed elevated, while mentions of food and grocery prices increased. Concerns about jobs and unemployment also became slightly more frequent.
Inflation expectations for the coming year eased, but most consumers still expected borrowing costs to rise. More than six in 10 — 61.3% — said they anticipated higher interest rates over the next 12 months.
Confidence varied considerably by age and income. Consumers under 35 remained the most confident, while higher-income households were generally more optimistic. Confidence fell the most among members of the Silent Generation when measured using a six-month moving average.
Despite the more cautious economic outlook, consumers were not retreating from all spending. Plans to buy homes and vehicles continued to rise on a six-month average basis. Consumers also expected to spend more on restaurants, streaming and mobile services, personal care, and domestic travel.
The results suggest consumers remain willing to spend, but growing doubts about business conditions, employment, and household income could make them more selective about where their money goes.