The numbers: The index of consumer confidence fell to 95.7 in July from a revised 98.4 in the prior month, the Conference Board said Tuesday.
The decline was larger than expected. Economists polled by The Wall Street Journal had forecast a decline to 97 from the initial June reading of 98.7.
Key details: The part of the survey that tracks how consumers feel about current economic conditions fell to 141.3 this month from 147.2 in June.
A gauge that assesses what Americans expect over the next six months ticked down to 65.3 from 65.8.
Big picture: Consumer confidence is heading lower amid rising inflation and continued talk of the elevated risks of recession. Consumers are feeling gloomy as inflation reduces their purchasing power.
Economists note that wealthy consumers are still spending, but the International Monetary Fund noted that total consumer spending is not nearly as robust as had been expected in April.
What the Conference Board said: “Looking ahead, inflation and additional rate hikes are likely to continue posing strong headwinds for consumer spending and economic growth over the next six months,” said Lynn Franco, senior director of economic indicators at the Conference Board.
What outside economists said: “Consumers’ increased pessimism is consistent with our view that consumer spending and the broader economy are downshifting to a much slower growth path amid high inflation, rapidly-rising interest rates, and financial market volatility. While we still see strong economic fundamentals preventing the US economy from slipping into recession this year, the pathway to a softish landing is narrowing,” said Kathy Bostjancic, chief U.S. economist at Oxford Economics.
Market reaction: U.S. stocks
opened lower Tuesday ahead of this week’s Federal Reserve policy meeting and downbeat news from Shopify