Despite eking out a slight increase from 40.6 in the prior month to 43.8 in July, the current conditions component remained range-bound in the low 40s for the third consecutive month. The collective indication from the panel suggests a plateauing of sorts as both the share of those who reported “better” conditions and those who pointed to “worse” conditions declined compared to June’s results, while the proportion of panel members that selected “unchanged” surged. Not surprisingly, many comments mentioned supply chain constraints, and while most of that commentary noted continued difficulties in that regard, a slight shift in sentiment may have gotten underway as more than one panelist described signs of improvement. Even with that glimmer of hope, inflation, inventory concerns, labor shortages, and recession fears served as a drag on business confidence.

Read the full report.