Consumer Confidence Ticked Up in July, but Planned Spending is Down

New York, NY, July 30, 2024--The Conference Board Consumer Confidence Index rose in July to 100.3 from a downwardly revised 97.8 in June.

The Present Situation Index, based on consumers' assessment of current business and labor market conditions, declined to 133.6 from 135.3 last month.

Meanwhile, the Expectations Index, based on consumers' short-term outlook for income, business and labor market conditions, improved in July to 78.2. That's up from 72.8 in June but still below 80-the threshold which usually signals a recession ahead. 

"Even though consumers remain relatively positive about the labor market, they still appear to be concerned about elevated prices and interest rates and uncertainty about the future, things that may not improve until next year," notes Dana M. Peterson, chief economist at The Conference Board.

"Expectations for future income improved slightly, but consumers remained generally negative about business and employment conditions ahead," Peterson continues. "Meanwhile, consumers were a bit less positive about current labor and business conditions. Potentially, smaller monthly job additions are weighing on consumers' assessment of current job availability.

"While still quite strong, consumers' assessment of the current labor market situation declined to its lowest level since March 2021."

Consumers' assessments of their family's financial situation, both currently and over the next six months, have deteriorated continuously since the beginning of 2024. 

"The proportion of consumers predicting a forthcoming recession ticked up in July but remains well below the 2023 peak," Peterson says.

Planned spending on services appeared weaker in July 2024 than in July 2023. Consumers said they plan to spend less over the next six months on many discretionary items, including gambling, amusement parks and personal travel. They also plan to purchase less expensive services-for example, streaming instead of going to the movies.

The planned reduction in services spending was across the board, but consumers continued to prioritize non-discretionary expenditures like healthcare and motor vehicle services. Meanwhile, on a six-month moving average basis, purchasing plans for homes fell to a 12-year low.