final consumer sentiment july

Scott McIntyre | Bloomberg | Getty Images

A customer shops for frozen food inside a Costco Wholesale Corp. store in Miami, Florida.

U.S. consumer sentiment slipped to 97.9 in July, remaining capped by rising fears over the repercussions of escalating tariffs.

Still, the index remained above expectations. Consumer sentiment was expected to drop to 97.1 in the final reading of July from 98.2 in June, according to economists polled by Reuters.

Chief Economist for The University of Michigan’s survey Richard Curtin said that consumers were worried about the impact of tariffs on the domestic economy, writing that an end to the trade war would be necessary to encourage consumers to participate in the economy.

“Resolution is critical to forestall decreases in consumer discretionary spending as a precaution against a worsening economy,” he wrote.

Despite marginal gains in June, the index has slumped since March when it reached its highest level since 2004 with a reading of 101.4. The sluggish trend has been fed by months of uneasiness around the tit-for-tat tariff dispute between the U.S. and the world’s largest economies.

The survey considers 500 consumers’ outlook on economic prospects, accounting for sentiment on personal finances, inflation, unemployment, government policies and interest rates.

Still, the U.S. Commerce Department reported that gross domestic product grew 4.1 percent in the second quarter, its best pace since 2014, as a result of a rise in consumer and business spending. Tariffs coupled with massive tax cuts last year helped boost economic growth, economists said.