U.S. consumers grew more confident in July as their short-term outlook improved, but sentiment about the current situation weakened, reversing recent trends.
The Conference Board, a business research group, said Tuesday that its consumer confidence index rose to 100.3 in July from a downwardly revised 97.8 in June.
The index measures both Americans’ assessment of their current economic situation and their outlook for the next six months.
The index, which measures Americans’ short-term expectations about their income, businesses and the job market, rose to 78.2 in July from 72.8 in June. A reading below 80 signals a possible recession in the near future.
Consumers’ current situation fell from 135.3 in June to 133.6 in July.
Rising food and grocery prices remain a major factor in consumer perceptions of the U.S. economy, and while inflation has slowed significantly since the Federal Reserve began raising interest rates in March 2022, price increases are still well above pre-pandemic levels.
“While consumers are relatively optimistic about the labor market, they still appear concerned about rising prices and interest rates and uncertainty about the future, things that may not improve until next year,” said Dana Peterson, chief economist at the Conference Board.
The number of people saying they were planning to buy a home fell to a 12-year low amid rising interest rates, soaring home prices and a continued shortage of supply. Putting home buyers off.
The number of consumers expecting a recession rose slightly this month but remains well below the 2023 peak, the committee said.
Consumer spending accounts for about 70% of U.S. economic activity, and economists are closely watching signs of American consumer sentiment.
The U.S. economy and labor market remain broadly healthy, although some weakness has surfaced due to rising interest rates.
Unemployment rate It rose to 4.1% in June. American employers added another 206,000 jobs last month, still the highest rate since November 2021.
Also on Tuesday, the government announced that U.S. job advertisements There was a slight decrease in JuneThe number of job openings in June was 8.18 million, still high but down from 8.23 million in May.
The country’s economy accelerated in the second quarter, Strong growth of 2.8% per yearHowever, this comes after growth in the first quarter was just 1.4%.
The economic slowdown this year reflects a series of aggressive interest rate hikes by the Federal Reserve that have led to sharp increases in borrowing rates for mortgages, auto loans, credit cards and many business loans.
The Fed concludes its two-day meeting on Wednesday, with most analysts expecting no changes to interest rates. First interest rate cut in more than four years It is scheduled to be presented at the next meeting in September.
