Calm Before The Storm? What Shocking Consumer Confidence Data Reveals | Stephanie Guichard

Summary

Stephanie Guichard of The Conference Board discusses July 2025 Consumer Confidence, which ticked up to 97.2 but remains below last year's level. She explains that consumers are cautious due to tariffs, inflation fears, and a perceived tougher job market, while recession expectations remain high despite no official recession. The conversation covers the disconnect with the LEI, inflation expectations, stock-price expectations, interest-rate expectations, discretionary spending plans, CEO confidence, and student loan repayment headwinds. She expects no major deterioration in consumer finances this year and sees a potential Fed cut late in the year as the economy slows.

• July Consumer Confidence rose to 97.2 but stays below last year and below recent low points.
• Consumers remain cautious on tariffs, inflation, and job-finding conditions, though own-income expectations are positive.
• LEI weakness is driven by consumer expectations, manufacturing orders, and the earlier yield-curve inversion; no official recession yet.
• Consumers expect 5.8% inflation and higher mortgage, auto, and credit-card rates, reflecting tariff and credit-score concerns.
• Discretionary spending intentions weakened for cars, homes, dining out, travel, and vacations; non-discretionary cuts are not yet evident.
• CEO confidence stabilized near neutral after swinging from optimistic to pessimistic.
• Student loan repayment restart adds a headwind and could spread delinquencies, but affects less than 20% of the population.
• The Conference Board sees no major consumer-finance deterioration this year and potential for a Fed cut late in the year.