Consumer confidence July reading slips as grocery costs weigh on households

Consumer confidence July data weakened as The Conference Board’s index fell 1.4 points to 90.8, with respondents citing food and grocery prices more often as a pressure on the economy. The decline points to continued strain on household sentiment even as some other measures have shown improvement this month.

The Conference Board said Tuesday that its Consumer Confidence Index declined from an upwardly revised 92.2 in June. The group’s preliminary July results covered survey responses collected from July 1 through July 22.

The index tracking consumers’ views of present conditions posted the sharper move. The Present Situation Index, which reflects assessments of current business and labor market conditions, dropped 3.6 points to 114.9, according to The Conference Board.

The Expectations Index, which measures views on income, business and labor market conditions over the short term, was unchanged at 74.7. The Conference Board said that level remained in negative territory.

Why did consumer confidence fall in July?

The Conference Board said write-in responses showed more mentions of food and grocery prices among factors affecting the economy. References to jobs and employment also increased slightly.

Comments about prices and oil and gas became less frequent than in June, though The Conference Board said those references remained elevated. Mentions of war, geopolitics and conflict also eased in July, according to the release.

Dana M. Peterson, chief economist at The Conference Board, said in the release that the Present Situation Index had become less positive for a third straight month, while the Expectations Index remained negative.

“Consumer appraisals of current business conditions and, to a lesser extent, perceptions of the current labor market both softened,” Peterson said. She added that consumers expected little improvement in business conditions over the next six months, while labor-market expectations were slightly less negative and household income expectations moderated but remained optimistic overall.

What is the Consumer Confidence Index?

The Consumer Confidence Index is a survey-based measure of how households view current economic conditions and their expectations for the near term. Investors and policymakers watch it because consumer spending is a major component of U.S. economic activity, and weaker confidence can signal caution among households.

The Conference Board’s July release sits alongside other recent sentiment readings that offered a more positive picture. The University of Michigan’s Surveys of Consumers found that consumer sentiment improved by 10% in early July, with its Index of Consumer Sentiment at 54.4, the highest reading since February, according to the survey.

The University of Michigan said its preliminary interviews ran from June 23 to July 13, and that 70% were completed before gas prices rose again when the United States resumed strikes against Iran. The survey attributed the improvement to easing prices at the pump before that later increase.

A separate PYMNTS Consumer Expectations Index for July, titled “The Confidence Divide: Why Americans Trust the Economy More Than Their Paychecks”, found confidence rose to 55.6. PYMNTS said the gain was driven by a 4.1-point monthly increase in household views of the U.S. macroeconomic and buying climate.

Together, the readings show a mixed July picture: The Conference Board reported softer confidence tied partly to grocery costs and current conditions, while the University of Michigan and PYMNTS measures recorded gains in their respective sentiment indexes.

This story draws on original reporting from PYMNTS.