Consumer Confidence Index rises in July
The Conference Board has released its July 2024 Consumer Confidence Index (CCI), which offers insight into our current—and perhaps future—financial milieu.
This most recent iteration of the CCI clocks in at 100.3, up from 97.8 in June 2024. The Present Situation Index—based on consumers’ assessment of current business and labor market conditions—declined to 133.6 from 135.3 last month. Meanwhile, the Expectations Index—based on consumers’ short-term outlook for income, business, and labor market conditions—improved in July to 78.2, which is up from 72.8 in June but still below 80 (the threshold which usually signals a recession ahead, per The Conference Board).
“Confidence increased in July, but not enough to break free of the narrow range that has prevailed over the past two years,” said Dana M. Peterson, chief economist at The Conference Board. “Even though consumers remain relatively positive about the labor market, they still appear to be concerned about elevated prices and interest rates, and uncertainty about the future; things that may not improve until next year.”
“Compared to last month, consumers were somewhat less pessimistic about the future. Expectations for future income improved slightly, but consumers remained generally negative about business and employment conditions ahead. Meanwhile, consumers were a bit less positive about current labor and business conditions. Potentially, smaller monthly job additions are weighing on consumers’ assessment of current job availability: while still quite strong, consumers’ assessment of the current labor market situation declined to its lowest level since March 2021.”
Peterson continues: “In July, confidence improved among consumers under 35 and those 55 and older; only the 35-54 age group saw a decline. On a six-month moving average basis, confidence remained the highest among consumers under 35. On a month-over-month basis, no clear pattern emerged in terms of income groups. On a six-month moving average basis, consumers making over $100K were the most confident, but the gap with other groups narrowed.”
Peterson added: “The proportion of consumers predicting a forthcoming recession ticked up in July but remains well below the 2023 peak. Consumers’ assessments of their family’s financial situation—both currently and over the next six months—was less positive. Indeed, assessments of familial finances have deteriorated continuously since the beginning of 2024.”
According to The Conference Board, July’s write-in responses showed that elevated prices, especially for food and groceries, and inflation remain the key drivers of consumers’ views of the economy, followed by the U.S. political situation and the labor market.
On a six-month moving average basis, purchasing plans for homes fell to a 12-year low.
Based on a supplemental question, planned spending on services appeared weaker in July 2024 than in July 2023. Consumers said they plan to spend less over the next six months on many discretionary items, including gambling, amusement parks and personal travel. They also plan to purchase less expensive services, such as streaming instead of going to the movies.
More key stats
Consumers’ assessment of current business conditions was slightly less positive in July, per The Conference Board. Also:
- 18.8% of consumers said business conditions were “good,” down slightly from 18.9% in June.
- 18.3% said business conditions were “bad,” up from 18.1%.
- Consumers’ appraisal of the labor market deteriorated in July.
- 34.1% of consumers said jobs were “plentiful,” down from 35.5% in June.
- 16.0% of consumers said jobs were “hard to get,” up from 15.7%.
