Consumer Confidence Slips for Third Straight Month
The Conference Board’s consumer confidence index, a survey that tracks consumer buying intentions and attitudes, found that consumer confidence fell for the third month in a row, dropping from 98.4 percent in June to 95.7 percent this month. That represents its lowest number since 2021.
The results indicate persistent recession risks, according to Lynn Franco, the Conference Board’s senior director of economic indicators.
“As the Fed raises interest rates to rein in inflation, purchasing intentions for cars, homes, and major appliances all pulled back further in July,” Franco said in a press release. “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.”
Labor Department data found that consumer prices rose 9.1 percent in the last year ending in June. Walmart lowered profit expectations this month as consumer spending habits change, stating that inflation is making Americans spend more money on food and necessities instead of electronics or clothing.
The Conference Board’s survey showed that consumers are more worried about their financial situation, and more consumers expect their income to decrease. This month, 17 percent of consumers said business conditions were good, down from 19.5 percent in June. However, 24 percent said business conditions were bad.
Yesterday, the Commerce Department released new data showing that gross domestic product fell at an inflation and seasonally adjusted annual rate of 0.9 percent in the second quarter, following a 1.6 percent pace of contraction in the first quarter. With two straight quarters of declining economic output, some are concerned that the United States is—or soon will be—in a recession. However, according to the Wall Street Journal, most economists surveyed expect the economy to grow in the third quarter and in 2022 as a whole.