The Consumer Confidence Index is up again, hitting 117 this month from 110 in June, as inflation eased and the economy continued to show resilience despite higher interest rates, the business research group the Consumer Board reported on Tuesday (July 25).
The index came in ahead of the 110.5 forecasted by economists and was the highest since July 2021. The index measures Americans’ assessment of current economic conditions and their outlook for the next six months.
“Consumer confidence rose in July 2023 to its highest level since July 2021, reflecting pops in both current conditions and expectations,” said Dana Peterson, Chief Economist at The Conference Board.
“Greater confidence was evident across all age groups, and among both consumers earning incomes less than $50,000 and those making more than $100,000,” Peterson added.
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The future expectations index rose to 88.3 in July, clearing the recession threshold of 80 recorded in June.
Respondents who said jobs are “plentiful” rose to 46.9% from 45.4%, while the number who said jobs are “hard to get” fell to 9.7% from 12.6%.
“In our periodic survey of services, consumers continued to report intentions to spend less on discretionary services — including travel, recreation, and gambling — going forward. By contrast, they anticipate spending more in the months ahead on necessary services like health care, as well as cheaper services like streaming from home,” Peterson said.
Present Situation
Consumers’ assessment of current business conditions was slightly less optimistic in July.
- 21.9% of consumers said business conditions were “good,” down from 23.4% last month.
- 15.2% said business conditions were “bad,” essentially unchanged from 15.3%.
However, consumers’ appraisal of the labor market improved.
- 46.9% of consumers said jobs were “plentiful,” up from 45.4%.
- 9.7% of consumers said jobs were “hard to get,” much lower than 12.6% last month.
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Expectations Six Months Hence
Consumers were more optimistic about the short-term business conditions outlook in July.
- 17.1% of consumers expect business conditions to improve, up from 14.6%.
- Meanwhile, 14.0% expect business conditions to worsen, down from 17.7% in June.
Consumers’ assessment about the short-term labor market outlook was more favorable.
- 16.4% of consumers expect more jobs to be available, up from 15.4%.
- Moreover, 14.8% anticipate fewer jobs, down from 16.7%.
Consumers’ short-term income prospects became more tempered in July.
- While 16.3% of consumers expect their incomes to increase, down from 18.6% last month,
- Only 9.7% expect their incomes will decrease, down from 11.8% in June.
Consumers’ assessment of their Family’s Current Financial Situation signals still-healthy family finances in July.
- 31.6% of consumers say their current family financial situation is “good,” up from 28.8% in June.
- 17.6% say their current family finances are “bad,” down from 18.6%.
Consumers’ assessment of their Family’s Expected Financial Situation, Six Months Hence softened in July.
- 31.1% of consumers expect their family finances to be “better,” down from 31.9% in June.
- 13.6% expect their family finances to be “worse,” up from 13.2%.
Consumers’ Perceived Likelihood of a US Recession over the Next 12 Months ticked up in July, but remained below the recent peak earlier in the year.
- 70.6% of consumers say a recession is “somewhat” or “very likely,” up from 69.9% in June.
About The Conference Board
The Conference Board is the member-driven think tank that delivers trusted insights for what’s ahead. Founded in 1916, we are a non-partisan, not-for-profit entity holding 501 (c) (3) tax-exempt status in the United States. ConferenceBoard.org