US Consumer Confidence Unexpectedly Drops in July

U.S. consumer confidence unexpectedly declined in July, falling to a reading of 90.8 from a revised 92.2 in June. The figure missed economist projections, which had anticipated a rise to 92.3. The downturn was primarily driven by the present situation index, which dropped to 114.9 from 118.5, reflecting a deterioration in how consumers view current business conditions and the labor market.

Dana M. Peterson, Chief Economist of The Conference Board, noted that confidence has continued a general downward trajectory since late 2021. While the expectations index remained flat at 74.7, the reading stays below the historical threshold of 80, which is typically associated with an increased risk of recession.

Despite the overall decline, expectations for the labor market showed slight improvement, although outlooks for business conditions worsened. Inflation expectations for the next 12 months were less elevated in July. The University of Michigan is scheduled to release its revised July consumer sentiment reading this Friday to provide further insight into consumer behavior.