Consumer confidence in the United States has fallen for the third consecutive month as Americans continue to pare back spending in the face of persistently high inflation.

On Tuesday, the Conference Board released the latest results of its Consumer Confidence Index and found that the index now stands at 95.7 -- 2.7 points lower from the 98.4 recorded in June. A lower score represents higher pessimism in American consumers' outlook on the economy.

In terms of how consumers presently view the economy based on their assessment of labor and business conditions, the Conference Board's Present Situations Index recorded a drop from 147.2 last month to 141.3. Consumers' expectations also dropped slightly on the Expectations Index, falling to 65.3 from 65.8.

Lynn Franco, Senior Director of Economic Indicators at The Conference Board, attributed the decline in consumer sentiment directly to present levels of inflation. This has had the effect of weighing down both present views and future expectations of the U.S. economy as concerns about the rising costs of goods exact their toll.

"The decrease was driven primarily by a decline in the Present Situation Index — a sign growth has slowed at the start of Q3. The Expectations Index held relatively steady, but remained well below a reading of 80, suggesting recession risks persist," Franco said in a statement.

The most recent reading of the Consumer Price Index (CPI) showed inflation rising to 9.1% in June, its highest level in about four decades. At the same time, gas prices have fallen from record levels of $5 a gallon in mid-June, with the average price of gas currently standing at about $4.37, according to the American Automobile Association (AAA).

Inflation’s ascent in the last year has spurred the Federal Reserve into taking a more hawkish stance on fiscal policies. Since March, the central bank has instituted multiple rate hikes and lawmakers have turned the taps off on pandemic-era stimulus spending in a bid to subdue inflation.

However, inflation has continued to hang in tough, lending to fears the Fed may institute a larger hike at its next meeting this week. The last hike in June was by 0.75%, the highest implemented since 1994.

This combination of high inflation and rising interest rates has had the effect of encouraging consumers to pare back purchases for the time being, warned Franco. Together they carry risks to economic growth prospects, likely adding to concerns that the U.S. economy is approaching a recession in the near-term.

"As the Fed raises interest rates to rein in inflation, purchasing intentions for cars, homes, and major appliances all pulled back further in July," Franco said. "Looking ahead, inflation and additional rate hikes are likely to continue posing strong headwinds for consumer spending and economic growth over the next six months."