Expectations improve, US consumer confidence hits 97.2 in July: TCB

US consumer confidence showed a modest improvement in July, with The Conference Board’s (TCB) Consumer Confidence Index rising to 97.2 from a revised 95.2 in June. While the overall index ticked up by 2 points, the underlying picture remained mixed.

The Present Situation Index, reflecting consumers’ views on current business and labour market conditions, fell slightly to 131.5, whereas the Expectations Index—which measures short-term outlook for income, business, and employment—rose by 4.5 points to 74.4. Despite the gain, expectations remained below the recession-warning threshold of 80 for the sixth consecutive month.

The increase in confidence was primarily driven by consumers aged over 35 and spanned most income groups, except the lowest bracket of households earning under $15,000 annually. Confidence rose among Republican respondents, while it held steady among Democrats and Independents. At the same time, fewer consumers now expect interest rates to rise, and more anticipate they may fall, though credit card rates are widely expected to climb further.

Consumers’ financial sentiment remained relatively steady but softened slightly in July. Views on current and future family finances deteriorated modestly, and while recession expectations declined slightly, they remained elevated compared to 2024 levels. Purchasing plans showed caution, TCB said in a release.

Consumers’ views on the current economy offered a mixed picture. Assessments of current business conditions were slightly more favourable, with 20.1 per cent describing conditions as ‘good,’ down marginally from 20.5 per cent in June, and 14.3 per cent calling them ‘bad,’ down from 15 per cent.

Labour market sentiment cooled: 30.2 per cent said jobs were ‘plentiful,’ up from 29.4 per cent, but 18.9 per cent said jobs were ‘hard to get,’ up from 17.2 per cent.

Expectations for the next six months showed slight optimism. 18.4 per cent of consumers expected business conditions to improve, up from 17.1 per cent, while the share expecting worsening conditions fell to 23.3 per cent from 24.8 per cent. Similarly, 17.5 per cent expected more jobs to become available, up from 15.9 per cent, while 25.4 per cent anticipated fewer jobs—slightly down from 25.7 per cent.

Income expectations were also more upbeat, with 18.2 per cent expecting a rise, up from 17.6 per cent, and 12 per cent anticipating a decline, down from 12.9 per cent.

ALCHEMPro News Desk (HU)