Background on The Conference Board and its Consumer Confidence Index
The Conference Board, a global research organization, publishes the Consumer Confidence Index (CCI) to gauge consumer sentiment about the U.S. economy’s current and future state. The CCI is based on two key components: the Present Situation Index, which measures consumers’ views on current economic conditions, and the Expectations Index, which assesses their outlook for the future.
July 2023 CCI Update
On July 29, 2023, The Conference Board released its latest CCI data, revealing that the confidence of U.S. consumers surpassed expectations despite lingering concerns over trade tariffs and inflation.
Key Findings
- CCI Increase: The Consumer Confidence Index rose by 2 points in July to reach 97.2, surpassing the consensus estimate of 95.5 points from Briefing.com.
- Present Situation Index: While consumers’ perception of the current economic situation showed slight improvement, it remained less optimistic compared to last year’s high levels.
- Job Availability Concerns: Nearly 19% of consumers reported finding employment difficult in July, up from 14.5% in January.
- Trade Tariffs and Inflation: Despite a slight decrease in average 12-month inflation expectations, concerns about high costs and inflation persisted among consumers.
Expert Commentary
Stephanie Guichard, an economist at The Conference Board, commented on the July CCI results:
“In July, pessimism about the future decreased slightly, leading to a minor improvement in overall consumer confidence.”
“Although consumer confidence has stabilized since May following April’s sharp decline, it remains below last year’s elevated levels,” added Guichard.
Consumer Sentiment Analysis
The July CCI data indicates that while consumers’ confidence has improved, it still lags behind the highs observed in 2022. Key factors influencing this sentiment include:
- Economic Conditions: Consumers’ perception of the current economy has shown marginal improvement but remains less optimistic than in previous years.
- Job Market: A growing number of consumers are finding it challenging to secure employment, signaling potential labor market strains.
- Trade Tariffs and Inflation: Despite a decrease in average inflation expectations, concerns about rising costs and trade-related uncertainties continue to weigh on consumer sentiment.
Key Questions and Answers
- Q: What is the Consumer Confidence Index? A: The Consumer Confidence Index, published by The Conference Board, measures consumer sentiment regarding the U.S. economy’s current and future state.
- Q: How is the CCI calculated? A: The CCI comprises two components: the Present Situation Index (current economic conditions) and the Expectations Index (outlook for the future).
- Q: What were the July 2023 CCI results? A: The CCI increased to 97.2 in July, surpassing the consensus estimate of 95.5 points.
- Q: What factors influenced the July CCI results? A: Despite improved optimism about the future and marginal gains in present situation perception, concerns over job availability and trade tariffs/inflation kept the CCI below 2024 levels.
