July 28, 2026
.
The Conference Board reported that consumer confidence fell 1.4 points in July to 90.9 after having risen 1.6 points in June .
Senior Economist at the Conference Board, Dana Peterson, said, “Consumer confidence moderated slightly in July, continuing a general downward sloping trajectory since late 2021.”
We have a hard time getting as pessimistic as what this index has been indicating. The stock market is near a record high level. The economy keeps cranking out a moderate number of new jobs each month which contrasts with virtually no growth in employment in 2025. AI is boosting growth in the investment spending component of GDP. We saw GDP growth of 2.1% in the first quarter and 1.5% growth in the second quarter. We expect GDP growth of 3.4% GDP in the third quarter and 2.3% growth for the year as a whole.
Given the magnitude of the earlier declines in confidence earlier this year one might have expected a sharp pullback in consumer spending. But that has not happened. Instead, real consumer spending has risen 2.5% in the past year. With real disposable income having risen 0.5% in the past year, we expect consumer spending to climb by 1.8% in 2026.
The reason why spending has not pulled back this time is presumably because of the impressive increase in household net worth. Drive by the rapid increase in stock prices and a 50% increase in home prices in the past five years, consumer net worth has risen rapidly to a record high level. This provides a psychological boost to middle and upper income families who own stocks and bonds. Lower income families are struggling and cutting back on spending where they can.
Confidence data reported by the Conference Board are roughly matched by the University of Michigan’s series on consumer sentiment. As shown in the chart below, trends in the two series are identical but there can be month-to-month deviations.
Stephen Slifer
NumberNomics
Charleston, SC
Follow Me