The Conference Board CCI in US rises in July to 117 from June's 110.1

The expectations index—based on consumers’ short-term outlook for income, business and labour market conditions—improved to 88.3 from 80 in June. Expectations climbed well above 80—the level that historically signals a recession within the next year.

Despite rising interest rates, consumers are more upbeat, likely reflecting lower inflation and a tight labour market. Although consumers are less convinced of a recession ahead, the New York-based non-profit business membership and research organisation still anticipates one likely before yearend.

“Headline confidence appears to have broken out of the sideways trend that prevailed for much of the last year. 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,” said Dana Peterson, chief economist at The Conference Board, in a release.

“Assessments of the present situation rose in July on brighter views of employment conditions, where the spread between consumers saying jobs are ‘plentiful’ versus ‘hard to get’ widened further. This likely reflects upbeat feelings about a labour market that continues to outperform,” he said.

“The proportion of consumers saying recession is ‘somewhat’ or ‘very likely’ to occur ticked up in July, contrary to the expectations index spiking this month above the threshold of 80. Still, recession expectations remained below their recent peak, suggesting fears of a recession have eased relative to earlier this year,” he added.

Consumers’ assessment of current business conditions was slightly less optimistic in July, with 21.9 per cent of consumers saying business conditions were ‘good’, down from 23.4 per cent last month.

While 15.2 per cent said business conditions were ‘bad’—essentially unchanged from 15.3 per cent last month, consumers’ appraisal of the labour market improved, with 46.9 per cent of them saying jobs were ‘plentiful’—up from 45.4 per cent last month.

Only 9.7 per cent of consumers said jobs were ‘hard to get’—much lower than 12.6 per cent last month.

Consumers were more optimistic about the short-term business conditions outlook in July, with 17.1 per cent of them expecting business conditions to improve—up from 14.6 per cent last month. Meanwhile, 14 per cent expect business conditions to worsen—down from 17.7 per cent in June.

Consumers’ assessment about the short-term labour market outlook was more favourable. While 16.4 per cent expect more jobs to be available—up from 15.4 per cent last month, 14.8 per cent anticipate fewer jobs—down from 16.7 per cent last month.

Consumers’ short-term income prospects became more tempered in July, with 16.3 per cent expecting their incomes to rise—down from 18.6 per cent last month. Only 9.7 per cent expect their incomes will decrease—down from last month’s 11.8 per cent.

ALCHEMPro News Desk (DS)