(The Center Square) – A new survey of consumers reports a lack of confidence in the economy as inflation soars.
The latest Confidence Index, a product of nonprofit research group Conference Board, indicates consumers have lost faith in the economy’s future. A new index is published monthly.
“Consumer confidence fell for a third consecutive month in July,” said Lynn Franco, senior director of Economic Indicators for Conference Board. “Concerns about inflation – rising gas and food prices, in particular – continued to weigh on consumers.”
Consumers say businesses were in a worse situation in July, with only 17% of the surveyed reporting that business conditions were “good,” down from the 19.5% reported in June.
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At the same time, 24% of those surveyed said business conditions were “bad,” up from 22.8% in June.
Consumers were even less optimistic about the labor market, with 12.3% saying jobs were “hard to get,” up from 11.6% reported last month.
On whether jobs were “plentiful,” 50.1% of the surveyed consumers said they were – down from last month’s 51.5%.
Consumers’ short-term expectations of their financial situation were also pessimistic, with 14.7% of the surveyed saying they expect their incomes to increase, down from 16.1% in June.
Another 15.7% of the surveyed expect their incomes to decrease, up from 15.3%.
Although consumers reported having low confidence regarding businesses’ current conditions, consumers were mixed in their short-term expectations, with 14% expecting business conditions to improve, down from 14.6%, while another 27.2% expect business conditions to worsen, down from 29.7%.
Consumers were also mixed in their expectations for the labor market, with 15.7% expecting more jobs to be available, down from 15.9% in June; another 21.4% anticipate fewer jobs, down from 22.2%.
This survey comes as the Federal Reserve is set to raise interest rates in an aggressive push to fight increasingly high inflationary pressures.
“As the Fed raises interest rates to rein in inflation, purchasing intentions for cars, homes, and major appliances all pulled back further in July,” Franco 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.”