Economy: Consumer Confidence Index (CCI) for July 2024

Consumer Confidence Index® (CCI) for this month (July, 2024) was released by The Conference Board® this morning:

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Predicted: 100.0

Actual: 100.3

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Previous Month (revised): 97.8

Change from Previous Month: +2.6% (+2.5 points)

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The "predicted" figure is what economists were expecting, while the "actual" is the true or real figure.

From Today's Report:

"...The Conference Board Consumer Confidence Index® rose in July to 100.3 (1985 = 100), 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). The cutoff date for the preliminary results was July 22, 2024.

'Confidence increased in July, but not enough to break free of the narrow range that has prevailed over the past two years,' said Dana M. Peterson, Chief Economist at The Conference Board. '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.'

'Compared to last month, consumers were somewhat less pessimistic about the future. Expectations for future income improved slightly, but consumers remained generally negative about business and employment conditions ahead. 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.'

Peterson added: 'The proportion of consumers predicting a forthcoming recession ticked up in July but remains well below the 2023 peak. Consumers’ assessments of their Family’s Financial Situation -- both currently and over the next six months -- was less positive. Indeed, assessments of familial finances have deteriorated continuously since
the beginning of 2024.'

Average 12-month inflation expectations remained stable at 5.4% in July, compared to a peak of 7.9% reported in 2022. The share of consumers expecting higher interest rates over the next 12 months dropped for the second month in a row to 50.3% -- the lowest since February 2024. Meanwhile, consumers were positive about the stock market, with 49.1% expecting stock prices to increase over the year ahead (the highest share since March), 23.5% expecting a decrease, and 27.4% expecting no change.

July’s write-in responses showed that elevated prices, especially for food and groceries, and inflation (the rate of change in prices), remain the key drivers of consumers’ views of the economy, followed by the US political situation and the labor market. Mentions about the forthcoming elections increased, although the share of respondents believing the 2024 election would impact the economy was lower than write-ins from July 2016.

2024 election would impact the economy was lower than write-ins from July 2016. On a six-month moving average basis, purchasing plans for homes fell to a 12-year low. While buying plans for cars were little changed, buying plans for most big-ticket appliances increased slightly. Additionally, more consumers reported plans to buy a smartphone or laptop/PC in the next six months..."

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Every month, The Conference Board sends a questionnaire to 5,000 U.S. households. Survey participants are polled about their feelings regarding the U.S. economy, current and future, and about their own fiscal circumstances. On average, 3,500 participants complete and return the 5-question survey.

The baseline "100" score for the CCI is associated with 1985 survey data.

When consumers feel good about the economy, they tend to do more spending, and vice versa.

Based in New York City, The Conference Board is a private, not-for-profit organization with a mission to, "create and disseminate knowledge about management and the marketplace to help businesses strengthen their performance and better serve society."

The CCI is usually released on the last Tuesday of the month.

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