By MATT OTT, AP Business Writer
WASHINGTON (AP) — Americans’ view of the U.S. economy improved this month, but Americans remain concerned about the impact of tariffs on their economic futures.
The Conference Board said Tuesday that its consumer confidence index rose two points to 97.2 in July, up from 95.2 the previous month.
The increase in confidence was in line with analysts’ forecasts.
In April, American consumers’ confidence in the economy sank to its lowest reading since May 2020, largely due to anxiety over the impact of President Donald Trump’s tariffs.
A measure of Americans’ short-term expectations for their income, business conditions and the job market rose 4.5 points to 74.4, however that’s still significantly below 80, the marker that can signal a recession ahead.
Consumers’ assessments of their current economic situation inched down by 1.5 points to 131.5.
Tariffs and the impact they could have on personal finances remains respondents’ greatest concern, the Conference Board said.
Trump’s aggressive and unpredictable policies — including massive import taxes — have clouded the outlook for the economy and the job market, raising fears that the American economy is headed toward a recession.
Consumers’ fears of a recession during the next 12 months declined slightly in July but remain elevated and above last year’s levels.
Also Tuesday, the International Monetary Fund upgraded its economic outlook for the U.S. and the world this year and next because Trump’s protectionist trade policies so far appear to be doing less damage than many expected.
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The IMF now forecasts 3% growth for the global economy this year. That’s down from 3.3% in 2024, but an improvement on its previous forecast of 2.8% growth.
Though concerns about inflation eased in July, it remains a major concern among respondents, who frequently mentioned higher prices in tandem with tariffs.
Another government report earlier this month showed that consumer prices rose last month to its highest level since February Trump’s sweeping tariffs push up the cost of everything from groceries and clothes to furniture and appliances.
Consumer prices rose 2.7% in June from a year earlier, up from an annual increase of 2.4% in May. Core prices, which exclude the volatile food and energy categories, also rose.
Economists pay close attention to core prices because they generally provide a better indication of where inflation is headed.
In the Conference Board’s survey, respondents’ views of the job market deteriorated for the seventh straight month, though the reading remains in positive territory as the U.S. labor market continues to churn out jobs.
In June, U.S. employers added a surprisingly strong 147,000 jobs and the unemployment rate ticked down unexpectedly to 4.1%.
However, those headline numbers masked some weaknesses as the U.S. economy contends with fallout from Trump’s economic policies.
The Labor Department said Tuesday that U.S. employers posted 7.4 million job vacancies last month, down from 7.7 million in May. The number of people quitting their jobs — a sign of confidence in their prospects elsewhere — dropped last month.
