American consumers experienced a mix of confidence and concern in July, according to the latest report from The Conference Board, a prominent business research group. The Consumer Confidence Index, a key measure of consumer sentiment, showed a slight uptick to 100.3 in July from a revised 97.8 in June. This index reflects both current economic conditions and expectations for the next six months.
While consumers expressed more optimism about the near-term future, with short-term expectations for income, business, and the job market improving to 78.2 from 72.8 in June, their views on current conditions weakened slightly. The measure of Americans' current economic conditions dipped to 133.6 in July from 135.3 in June.
One of the primary factors influencing consumer sentiment continues to be elevated prices for food and groceries. Despite a decrease in inflation since the Federal Reserve began raising interest rates earlier this year, prices remain significantly higher than pre-pandemic levels.
Dana Peterson, Chief Economist at The Conference Board, noted that while consumers are generally positive about the labor market, concerns about high prices, interest rates, and overall economic uncertainty persist. These factors may not see significant improvement until the following year.
The report also highlighted a notable decline in the number of consumers planning to purchase a home, reaching a 12-year low. Factors such as rising interest rates, soaring home prices, and limited housing supply are contributing to this trend.
Despite some concerns, the number of consumers predicting a recession saw a slight increase in July but remains below its peak for 2023. Consumer spending, which drives nearly 70% of U.S. economic activity, continues to be closely monitored by economists for insights into consumer sentiment and its impact on the broader economy.
