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Consumer confidence fell in July for the third consecutive month, according to the Conference Board, an international nonprofit consortium of corporations.
Consumers’ outlook fell to a rating of 95.7 last month from 98.4 in June and dropped below economists’ expectation of 97.2, freighted with concerns about rising food and fuel prices in particular.
Buyers are now less likely to buy cars, homes, and major appliances in the near future, due largely to the combination of rising prices and higher interest rates, the survey found.
Consumers also had a gloomier view of current business conditions and the outlook for job growth than in June.
TREND FORECAST: As we had forecast in “Consumer Confidence Sags in May” (7 Jun 2022), consumer confidence will not rise until inflation shows a consistent downward trend and wages rates rise above inflation.
Some analysts claim that inflation has peaked, or is peaking now. If so, that will not be clear until at least October, when September’s figures are reported.
With U.S. inflation rising again in July, it remains unlikely that inflation will reverse course this year without a sudden, dramatic recession. And, considering the real economic conditions that are affecting consumers, such as rising debt levels, the “confidence” levels will continue to decline.