U.S. consumer confidence fell in July as Americans’ views about current business conditions and the labor market deteriorated.

The Conference Board’s gauge of confidence decreased 1.4 points to 90.8 after an upward revision to the prior month, data released Tuesday showed. The median estimate in a Bloomberg survey of economists was 92.4.

An indicator of present conditions dropped to the lowest since 2021, while a measure of expectations for the next six months was unchanged.

Elevated gasoline and food prices likely weighed on U.S. households, underscoring broader concerns about persistent inflation and the rising cost of living. Hiring, meanwhile, has shown signs of slowing after a strong spring.

The Conference Board survey showed that perceptions of the job market softened in July. The share of consumers who said jobs were plentiful declined to 24.6%, while the share saying jobs were hard to get also edged lower.

The difference between these two — a metric closely followed by economists — narrowed to the smallest since 2021. That suggests a tough labor market for job seekers.

The survey period for the report was July 1-22, a span that saw prices at the pump fall to their lowest level since March and then rebound as renewed hostilities in the U.S.-Iran conflict sent oil prices higher. The U.S. paused strikes over the weekend, calming markets and sending prices lower.

The report indicated that while references to gas prices eased, they remained elevated. Respondents also made more comments about grocery prices.

Consumer outlook

Looking ahead, respondents in the Conference Board survey were more pessimistic about business conditions in the months ahead. However, they were a bit more optimistic about the outlook for the labor market.

U.S. consumers have continued to spend despite concerns about the cost of living and the labor market. U.S. retail sales rose for the fifth consecutive month in June, and economists expect consumer outlays helped drive economic growth in the second quarter.

Tuesday’s report showed Americans plan to continue to spend on big-ticket items and services like restaurants over the next six months. Travel intentions also picked up.

Inflation expectations over the next year eased, though the majority of respondents continue to expect interest rates to increase in the next 12 months.

The Commerce Department is set to release second-quarter gross domestic product and June consumer spending, income and inflation data on Thursday.

A separate measure of consumer sentiment released earlier this month by the University of Michigan rose to a five-month high in July, though most of the responses from that survey were completed prior to the U.S. strikes on Iran earlier this month.

(With assistance from Julia Fanzeres.)

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