Consumer confidence slips for third straight month in July

Consumer confidence slipped for the third straight month in July as sky-high prices dampened demand for products and services, according to a new survey.

The Conference Board’s consumer confidence index, which tracks consumer attitudes and buying intentions, dropped from 98.4 percent last month to 95.7 percent in July, its lowest level since last year. 

Lynn Franco, the Conference Board’s senior director of economic indicators, said in a statement that the survey results indicate that recession risks persist.

“As the Fed raises interest rates to rein in inflation, purchasing intentions for cars, homes, and major appliances all pulled back further in July. 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,” Franco said.

Consumer prices rose 9.1 percent over the last year ending in June, according to Labor Department data, putting pressure on shoppers’ wallets. 

Walmart on Monday lowered profit expectations due to changing consumer spending trends. The retail giant said that inflation is forcing Americans to spend more on food and other necessities rather than clothing or electronics. 

The Conference Board, a nonprofit backed by large U.S. corporations, found that just 17 percent of consumers said business conditions are good, down from 19.5 percent the month prior, while 24 percent said conditions are bad.

The survey results showed that consumers are increasingly worried about their financial situation, with more consumers expecting their income to decrease rather than rise, a reversal from June.

Observers are bracing for Thursday’s government data release that could show a second straight quarter of shrinking gross domestic product, a typical indicator of a recession.