The Conference Board Consumer Confidence Index improved by 2.0 points in July to 97.2, from 95.2 in June (revised up by 2.2 points).
Source: Bloomberg
But expectations remained below the threshold of 80 that typically signals a recession ahead for the sixth consecutive month.
“Consumer confidence has stabilized since May, rebounding from April’s plunge, but remains below last year’s heady levels,” said Stephanie Guichard, Senior Economist, Global Indicators at The Conference Board.
“In July, pessimism about the future receded somewhat, leading to a slight improvement in overall confidence.
All three components of the Expectation Index improved, with consumers feeling less pessimistic about future business conditions and employment, and more optimistic about future income.
Meanwhile, consumers’ assessment of the present situation was little changed.
They were a tad more positive about current business conditions in July than in June.
"However," Guichard notes, "their appraisal of current job availability weakened for the seventh consecutive month, reaching its lowest level since March 2021.
Notably, 18.9% of consumers indicated that jobs were hard to get in July, up from 14.5% in January.”
Source: Bloomberg
Guichard added:
“Consumers’ write-in responses showed that tariffs remained top of mind and were mostly associated with concerns that they would lead to higher prices.
In addition, references to high prices and inflation rose in July, even though consumers’ average 12-month inflation expectations eased slightly to 5.8%, down from 5.9% in June and a peak of 7% in April.
A number of survey respondents mentioned the recent budget reconciliation legislation passed by Congress (referring to it as the “Big Beautiful Bill”)—with some consumers praising its potential positive economic impact and others expressing concerns. However, the bill and its implications were relatively low on the list of themes that consumers were focused on in July.”
On the bright side, expectations for higher rates and lower stocks tumbled in July (the latter had reached 14 year highs in April after Liberation Day chaos)
Source: Bloomberg
July’s modest gain in confidence was driven by consumers over 35 years old and shared across all income groups except those earning the least (with household annual income below $15K). By partisan affiliation, confidence improved in July among Republican consumers and was stable for Democrats and Independents.