Consumer confidence fell more than expected in July as Americans became increasingly dissatisfied with the state of the US economy.
The Conference Board said on Tuesday that the consumer confidence index fell to 95.7 for the third month in a row, from 98.4, which was revised downward in June. The estimates of economists surveyed by Econoday were 96.8.
The Current Conditions Barometer, based on current job and labor market conditions, fell to 141.3 from 147.2 in June. The expectation indicator fell from 65.8 to 65.3.
“Consumer confidence fell for the third month in a row in July,” said Lynn Franco, economic director at The Conference Board. “The decrease was mainly driven by the decline in the Current Situation Index – a sign of slowing growth in the early third quarter. The Prospects Index remained relatively stable, but below 80, signaling continued recession risks. Concerns about inflation – particularly rising gas and food prices – continued to put pressure on consumers.”
Only 17.0% of consumers rated business conditions as “good” compared to 19.5% last month. Twenty-four percent of consumers described business conditions as “difficult” compared to 22.8 percent in June.
The labor market outlook is improving but softening. The share that said it had a lot of work fell to 50.1% from 51.5% in June. The rate of those who think it is difficult to find a job increased from 11.6% to 12.3%. The outlook for the job market six months from now is mixed. The proportion of consumers expecting fewer jobs fell from 22.2% to 21.4%. The rate of those expecting a job increase also decreased from 15.9% to 15.7%.
Many do not expect an improvement in business conditions. Only 14% of consumers say that conditions will improve within six months, compared to 14.6%. At the same time, the percentage of those expecting worsening conditions decreased from 29.7% to 27.2%.
High inflation and monetary tightening to contain inflation will likely slow consumer spending in the second half of 2022.
“Intentions to buy cars, homes and appliances weakened further in July as the Fed raised interest rates to curb inflation. “Looking forward, inflation and further rate hikes are likely to continue creating strong headwinds for consumer spending and economic growth over the next six months,” Franco said.
Source: Breitbart
