It’s the third consecutive month that the index fell, a decline driven by consumers souring on the state of current business conditions. The index that tracks assessments of current business and labor conditions tumbled to 141.3 from 147.2, according to the report.
It’s a sign that growth has slowed during the third quarter, Lynn Franco, The Conference Board’s senior director of economic indicators said in a statement.
Consumers’ expectations for the next six months ahead held relatively steady, but remain at a level that suggests recession risks persist, she noted, adding that inflation continues to weigh heavily.
“As the [Federal Reserve] 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.”
While the Fed attempts to bat down the highest inflation seen since the 1980s, confidence is also waning among business leaders that a recession can be avoided, according to the National Association of Business Economics’ survey of business conditions during the second quarter.
About 43% of respondents said they think there’s a greater than 50% chance that the US will experience a recession in the next 12 months, while just 13% said that in April.
The Business Conditions Survey, which included responses from 58 panelist NABE members, provided a snapshot of an economy in flux: Businesses are still seeing some sales rise, but the soaring cost of materials and labor mean companies are shelling out more than they have in at least 25 years to keep their operations running.