News

Consumer confidence increased 2.0 points in July to 97.2. The Consumer Confidence Index stabilized following June’s decline but remains below the confidence level one year ago. Among its components, the Present Situation Index declined slightly, while the Expectations Index improved, with consumers’ pessimism about the future receding some.

The Present Situation Index, reflecting current business and labor market conditions, fell 1.5 points to 131.5. Meanwhile, the Expectations Index, which reflects consumers’ short-term outlook for income, business and labor market conditions, rose 4.5 points to 74.4, still below the recession signal threshold of 80.

Views of the current labor market situation are still poor, with 30.2% of consumers saying jobs were “plentiful,” up from June (29.4%), while 18.9% said jobs were “hard to get,” up from 17.2% the prior month and from 14.5% in January. Looking to the future, 25.4% anticipate fewer available jobs in the next six months, down slightly from 25.7% the prior month.

Mentions of tariffs were still prevalent in written responses, with consumers expressing fears they will lead to higher prices. Additionally, mentions of high prices and inflation rose in July, despite consumers’ 12-month inflation expectations easing to 5.8% from 5.9% in June and 7.0% in April. Meanwhile, 53% of consumers, compared to 57.1% in June, expect interest rates to rise, and more consumers (21.2% vs. 18.4% in June) expect rates to fall. While mentioned by a few respondents, the positive economic potential of the Big Beautiful Bill remained low on the list of consumers’ written responses in July.

Buying plans for cars and homes declined in July but were stable on a six-month moving average basis. Consumers’ plans for buying big-ticket items were mixed in July, especially for appliances, but plans to buy electronic goods increased slightly. Overall, consumers’ views of their current and future financial situation deteriorated slightly from June but remained solid overall.