Americans’ confidence in the economy declined again this month as the ongoing conflict in Iran continued to push US gasoline prices above $4 per gallon.
The Conference Board said on Tuesday that its consumer confidence index dipped to 89.4 in August from 90.2 in July. That was the lowest level in seven months but was essentially within the same lukewarm range it has been in since the beginning of the year. In late 2024 and early 2025, readings were consistently above 100.
Respondents’ views of their present situation improved, but their short-term outlook soured.
Americans remain frustrated with the economy after five years of elevated inflation, potentially posing a risk to Donald Trump and Republicans in the midterm elections, which are fewer than 70 days away.
Write-in responses to the board’s survey, collected from 3 August to 16 August, were slightly more pessimistic this month. References to prices in general – and oil and gas prices specifically – remained elevated. Comments about war and geopolitics, food prices, trade, and jobs rose in August.
Trump continues to blame high prices on his predecessor Joe Biden, yet inflation has risen since Trump’s inauguration last year.
The Federal Reserve’s preferred inflation gauge – the personal consumption expenditures (PCE) price index – was up 3.7% in June from a year earlier. That was down from May’s 4.1% year-over-year increase but up from 2.8% before the Iran war began on 28 February. It was 2.5% when Trump was inaugurated in January 2025.
The government will issue its July PCE data on Wednesday.
Consumers’ views of the current labor market improved in August, with 27% saying jobs were “plentiful”, up from 24.4% in July. However, respondents were more negative about the labor market over the next six months, with just 14.6% expecting more jobs to be available, down from 16.4% last month.
The US job market stalled unexpectedly in July as employers cut 23,000 jobs. To make matters worse, Department of Labor revisions erased 103,000 jobs from previously reported May and June payrolls.
The unemployment rate fell to 4.1%, but for the wrong reason: thousands of people dropped out of the labor market, leaving fewer people competing for work.
