American consumer confidence fell for a second straight month in August, dropping to its lowest level in seven months as elevated gas prices and a darkening view of the job market weighed on households’ expectations for the months ahead.
The Conference Board’s Consumer Confidence Index fell 0.8 points to 89.4, down from a downwardly revised 90.2 in July and below the 90.2 economists polled by Reuters had forecast. The decline was driven entirely by consumers’ outlook for the future: the Expectations Index, which measures the short-term outlook for income, business, and labor conditions, fell 5.8 points to 68.2 — remaining below the level of 80 that has historically signaled a recession within the next year, a threshold the index has now stayed under continuously since February 2025, an 18-month stretch. That decline more than offset a genuine bright spot: the Present Situation Index, reflecting how consumers view current business and labor conditions, jumped 6.8 points to 121.2, its first improvement in four months.
“Consumer confidence moderated slightly in August for a second consecutive month,” said Dana M. Peterson, chief economist at the Conference Board. “The Expectations Index slipped further into negative territory, which was offset by a moderate rise in the Present Situation Index after declining in the past three months. Consumer appraisals of current business conditions were mildly positive. Perceptions of the current labor market improved, reversing three months of moderate decline. Looking ahead, consumers were more pessimistic about business conditions and the labor market over the next six months.”
Independent economists have tied the decline in outlook specifically to gas prices, which have remained above $4 a gallon amid the ongoing conflict involving Iran. For comparison, confidence readings were consistently above 100 throughout late 2024 and early 2025.
Consumers’ own written comments in the survey reflected similar themes: mentions of prices generally, and oil and gas specifically, remained elevated in August, while references to war and conflict, groceries, trade, and jobs all increased compared with July.
The report showed a genuine split beneath the headline number. On the labor market specifically, perceptions actually improved: 27% of consumers called jobs “plentiful,” up from 24.4% in July, while those saying jobs are “hard to get” fell to 19.5% from 21.7%. But looking ahead, only 14.6% expected more jobs to become available in the next six months, down from 16.4%, while 26.1% expected fewer jobs, up slightly from 25.3%.
Confidence also diverged by generation and politics: on a six-month moving average basis, Gen Z and Millennials remained the most confident age groups, while Generation X, Baby Boomers, and the Silent Generation trailed by a wider margin. By political affiliation, confidence softened among independents and Republicans in August while ticking up slightly among Democrats.
Despite the softer outlook, most consumers don’t expect a recession: the share who called a U.S. recession “very likely” within 12 months ticked up slightly but remained low overall, and consumers still expected both higher stock prices and, for 61.3% of respondents, higher interest rates over the coming year.
