The Conference Board's Consumer Confidence Index® unexpectedly inched lower in July, falling 1.4 points to 90.8. The index was below the forecast of 92.4. Note that the survey period for this month's results was July 1st-22nd, a timeframe that includes the ongoing conflict in the Middle East.
Key Takeaways
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The Conference Board's Consumer Confidence Index® decreased by 1.4 points to 90.8 in July, missing forecast of 92.4.
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The Present Situation Index fell 3.6 points to 114.9, marking a third consecutive month of decline.
- The Expectations Index remained unchanged at 74.7, staying below the recessionary 80.0 threshold since February 2025.
The Present Situation Index, which is based on consumers' assessment of current business and labor market conditions, fell 3.6 points to 114.9. Meanwhile, the Expectations Index, which is based on consumers' short-term outlook for income, business, and labor market conditions, was unchanged at 74.7. Note that a level of 80 or below for the Expectations Index historically signals a recession within the next year and the index has been below 80 since February 2025.
“Consumer confidence moderated slightly in July, continuing a general downward sloping trajectory since late 2021,” said Dana M Peterson, Chief Economist, The Conference Board. “The Present Situation Index was less positive for a third consecutive month while the Expectations Index remained in negative territory. Consumer appraisals of current business conditions and, to a lesser extent, perceptions of the current labor market both softened. Looking ahead, consumers anticipate little improvement in business conditions over the next six months, but expectations for the labor market were slightly less negative. Expectations for household incomes moderated but remained optimistic overall.”
Consumers’ write-in responses on factors affecting the economy continued to be mostly pessimistic in July. References to prices and oil and gas eased in frequency but remain elevated. Comments about food and grocery prices increased. Mentions of war, geopolitics, and conflict eased during the sample period. However, as the fighting has reaccelerated quite recently there could be an increase in these mentions in the revised data for July. Notably, references to jobs and unemployment picked up slightly.
Consumers’ average and median 12-month inflation expectations were less elevated in July. Most consumers—61.3%, unchanged from June—still expected higher interest rates over the next 12 months. Notwithstanding recent volatility in the equity markets, consumers still expected higher stock prices a year from now.
Background on the Consumer Confidence Index
The Conference Board Consumer Confidence Index measures the consumers attitudes and confidence in the economy, business conditions, and labor market, with higher readings indicating higher optimism. The general assumption is that when consumers are more optimistic they will spend more and stimulate economic growth. However, if consumers are pessimistic then spending will decline and the economy may slow down. The index is based on a 5 question survey, with 2 questions related to present conditions and 3 questions related to future expectations. The survey began in 1967 and was conducted every two months but changed to monthly reporting in 1977.
