A report released by the Conference Board on Tuesday revealed an unexpected improvement in U.S. consumer confidence for July, surpassing economists' predictions.
The Conference Board's consumer confidence index increased to 100.3 in July, up from the revised figure of 97.8 in June. This rise defied economists' expectations, who had anticipated a slight dip to 99.5 from the originally reported 100.4 for the previous month.
"Confidence saw a boost in July, though it has not yet escaped the narrow range observed over the past two years," commented Dana M. Peterson, Chief Economist at The Conference Board. She further noted, "Consumers remain optimistic about the labor market but are still wary of high prices, interest rates, and future uncertainties—factors unlikely to see improvement before next year.”
The increase in the headline index was largely due to a surge in the expectations index, which climbed to 78.2 in July from 72.8 in June. However, it still falls short of 80, the level typically associated with a recession forecast.
Conversely, the present situation index saw a slight decline, dropping to 133.6 in July from 135.3 in June. Peterson explained, "Though consumers are marginally less pessimistic about the future compared to last month, their expectations for future income improved slightly. Nevertheless, their outlook on business and employment conditions remains generally negative."
"Additionally," she added, "consumers are slightly less optimistic about current labor and business conditions, perhaps influenced by smaller monthly job gains affecting their perception of job availability."
In a related note, the University of Michigan reported revised data on Friday showing that U.S. consumer sentiment for July had deteriorated less than initially estimated. The consumer sentiment index for July was adjusted upward to 66.4 from the preliminary 66.0, counter to economists' expectations of no change.
Despite this upward revision, the July consumer sentiment index remains lower than June’s 68.2, marking the lowest level since November 2023.
