U.S. consumer sentiment climbed more than expected in July, with optimism about future economic and job conditions growing across most demographics, according to data released by the Conference Board. The Consumer Confidence Index rose to 97.2, beating forecasts of 95.8 and marking a steady rebound from June’s revised 95.2.
The Expectations Index, which gauges outlook for business, labor, and income conditions over the next six months, increased to 74.4—its highest since January. Despite remaining below the recession-risk threshold of 80, this is the second consecutive monthly gain. All three subcomponents of the index showed improvement, with fewer consumers anticipating worsening conditions and more expecting income growth.
Current conditions, however, saw little movement. The Present Situation Index slipped slightly to 131.5 from 133.0 in June. The share of consumers saying jobs are “hard to get” increased to 18.9 percent, the highest level since March 2021. Still, more respondents reported that jobs are “plentiful,” and fewer rated business conditions as “bad.”
Confidence gains were strongest among adults over age 35 and nearly all income groups—except those earning under $15,000 annually, who reported no improvement. Republican-leaning respondents reported increased confidence, while Democrats and independents remained steady.
Inflation expectations for the next 12 months edged down to 5.8 percent, though concerns about high prices and tariffs continued to weigh on sentiment. Consumers cited inflation and tariffs as factors potentially driving costs higher, even as the measured inflation outlook eased slightly.
Expectations for the stock market and interest rates shifted in a more positive direction. Nearly 48 percent of consumers now expect stock prices to rise, a notable jump from 38 percent just three months prior. Fewer expect additional interest rate hikes.
Spending intentions were mixed. Fewer consumers plan to purchase homes or cars, while interest in electronics ticked up slightly. Travel and dining plans softened, with a modest rise in international travel expectations offset by declining interest in domestic travel.
The headline confidence index remains below 2023 levels, but the recent uptick signals a possible stabilization in consumer sentiment after a volatile spring. The data cutoff for the report was July 20.
