Consumer confidence edged lower in July amid softer hiring and a dim view of business conditions.
The Conference Board’s index of confidence slid 1.4 points to 90.8 after an upward revision to the prior month, data released Tuesday showed. This was below the consensus forecast.
The gauge of current economic conditions—based on consumers’ assessment of current business and labor market conditions—declined by 3.6 points to 114.9, its third consecutive monthly decline. Consumer assessments of current business conditions and the current labor market both weakened.
The gauge of expectations for the future—which looks to the short-term outlook for household income, business, and labor market conditions—was unchanged at 74.7. Consumers expect little improvement in business conditions but expectations for labor markets were less negative. Expectations for household income dipped but remain positive.
The Conference Board noted that write-in responses continued to be mostly pessimistic, although references to oil and gas prices were less frequent. Worries about food and grocery prices, on the other hand, were more prominent.
“Mentions of war, geopolitics, and conflict eased during the sample period. However, as 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,” the Conferenced Board said in its report.
Inflation expectations slid in July but remain elevated. Most consumers expect higher interest rates over the next 12 months, echoing financial market indicators forecasting Fed hikes later this year.
Despite the slide in confidence, the Conference Board said homebuying and auto purchasing expectations continued their upward climb 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,” the Conference Board said.
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