Consumer Confidence Dips

By Staff Writer July 27, 2022 151

The Conference Board Consumer Confidence Index decreased in July, following a larger decline in June. The Index now stands at 95.7 (1985=100), down 2.7 points from 98.4 in June. The Present Situation Index—based on consumers’ assessment of current business and labor market conditions—fell to 141.3 from 147.2 last month. The Expectations Index—based on consumers’ short-term outlook for income, business, and labor market conditions—ticked down to 65.3 from 65.8.

“Consumer confidence fell for a third consecutive month in July,” said Lynn Franco, Senior Director of Economic Indicators at The Conference Board. “The decrease was driven primarily by a decline in the Present Situation Index—a sign growth has slowed at the start of Q3. The Expectations Index held relatively steady, but remained well below a reading of 80, suggesting recession risks persist. Concerns about inflation—rising gas and food prices, in particular—continued to weigh on consumers.

“As the Fed raises interest rates to rein in inflation, purchasing intentions for cars, homes, and major appliances all pulled back further in July. 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.” 

Consumers’ appraisal of current business conditions was less favorable in July, with 17.0% of consumers reporting business conditions were “good,” down from 19.5%.

Twenty-four percent of consumers said business conditions were “bad,” up from 22.8%.

Consumers’ assessment of the labor market was less optimistic.

More than 50% of consumers said jobs were “plentiful,” down from 51.5% and 12.3% of consumers said jobs were “hard to get,” up from 11.6%.

Consumers were mixed about the short-term (six months forward) business conditions outlook in July and 14.0% of consumers expect business conditions will improve, down from 14.6%.

Conversely, 27.2% expect business conditions to worsen, down from 29.7%.

Consumers were also mixed about the short-term labor market outlook. Just over 15% of consumers expect more jobs to be available, down marginally from 15.9%.

Conversely, 21.4% anticipate fewer jobs, down from 22.2%.

Consumers were more pessimistic about their short-term financial prospects with 14.7% of consumers expecting their incomes to increase, down from 16.1%.

The survey shows 15.7% expect their incomes will decrease, up from 15.3%.

The monthly Consumer Confidence Survey, based on an online sample, is conducted for The Conference Board by Toluna, a technology company that delivers real-time consumer insights and market research through its innovative technology, expertise, and panel of over 36 million consumers. 

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Last modified on Tuesday, 02 August 2022 13:33