July 26 (UPI) -- Consumer confidence took another hit in July as Americans' view of the economy weakened for a third straight month amid worries of a recession and ongoing inflation.
The Consumer Confidence Index slipped 2.7 points in July to 95.7, The Conference Board announced Tuesday, calling it a moderate decline. July's drop follows a much larger decline in June when consumer confidence dropped 4.8 points to the month's revised reading of 98.4.
The Present Situation Index, which is based on consumers' assessment of current business conditions, fell to 141.3 in July from 147.2 last month. The Expectations Index, which is based on consumers' short-term outlook for income, business and labor market condition, slipped to 65.3 from 65.8.
The drop in consumer confidence was "driven primarily by a decline in the Present Situation Index -- a sign growth has slowed at the start of Q3," said Lynn Franco, senior director of economic indicators at The Conference Board. "The Expectations Index held relatively steady, but remained well below a reading of 80, suggesting recession risks persist."
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The monthly Consumer Confidence Survey is based on an online sample of 36 million consumers and continues to show Americans' concerns about prices that continue to rise.
"Concerns about inflation -- rising gas and food prices, in particular -- continued to weigh on consumers," Franco said.
On Wednesday, the Federal Reserve is expected to make another move at the close of its policymaking meeting to tame the highest inflation since the 1980s. The Fed could raise its benchmark rate by another 75 basis points, the same rate hike it announced in June and the third since March.
"As the Fed raises interest rates to rein in inflation, purchasing intentions for cars, homes and major appliances all pulled back further in July," said Franco. "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."
