US consumer confidence falls on worse business, labour views
Elevated petrol and food prices likely weighed on US households
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[WASHINGTON] US consumer confidence fell in July as Americans’ views about current business conditions and the labour market deteriorated.
The Conference Board’s gauge of confidence decreased 1.4 points to 90.8 after an upward revision to the prior month, data released on Tuesday (Jul 28) showed. The median estimate in a Bloomberg survey of economists was 92.4.
An indicator of present conditions dropped to the lowest since 2021, while a measure of expectations for the next six months was unchanged.
Elevated petrol and food prices likely weighed on US households, underscoring broader concerns about persistent inflation and the rising cost of living. Hiring, meanwhile, has shown signs of slowing after a strong spring.
The Conference Board survey showed that perceptions of the job market softened in July. The share of consumers who said jobs were plentiful declined to 24.6 per cent, while the share saying jobs were hard to get also edged lower.
The difference between these two – a metric closely followed by economists – narrowed to the smallest since 2021. That suggests a tough labour market for job seekers.
The survey period for the report was July 1-22, a span that saw prices at the pump fall to their lowest level since March and then rebound as renewed hostilities in the US-Iran conflict sent oil prices higher. The US paused strikes over the weekend, calming markets and sending prices lower.
The report indicated that while references to gas prices eased, they remained elevated. Respondents also made more comments about grocery prices.
Looking ahead, respondents in the Conference Board survey were more pessimistic about business conditions in the months ahead. However, they were a bit more optimistic about the outlook for the labour market.
US consumers have continued to spend despite concerns about the cost of living and the labour market. US retail sales rose for the fifth consecutive month in June, and economists expect consumer outlays helped drive economic growth in the second quarter.
Tuesday’s report showed Americans plan to continue to spend on big-ticket items and services like restaurants over the next six months. Travel intentions also picked up.
The Commerce Department is set to release second-quarter gross domestic product and June consumer spending, income and inflation data on Thursday. BLOOMBERG
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