Matt Ott, Associated Press
WASHINGTON (AP) — Americans' confidence in the economy declined in August as gasoline prices remained above $4 per gallon, influenced by the ongoing conflict in Iran.
The Conference Board reported on Tuesday that its consumer confidence index fell to 89.4 in August from 90.2 in July, marking the lowest level in seven months. Despite this decline, the index has remained in a similar range since the beginning of the year, with readings above 100 recorded in late 2024 and early 2025.
While respondents reported improved views of their current situation, their short-term outlook has become more negative.
Concerns about the economy persist, particularly regarding inflation, which may impact President Donald Trump and Republicans in the upcoming midterm elections, less than 70 days away.
Survey responses collected from August 3 to August 16 indicated a more pessimistic sentiment this month, with mentions of high prices—especially for oil and gas—remaining prevalent. Additionally, comments related to war, geopolitics, food prices, trade, and jobs increased in August.
Trump has attributed high prices to his predecessor, Democrat Joe Biden, despite inflation rising since his inauguration last year. The Federal Reserve's preferred inflation measure, the personal consumption expenditures price index, increased by 3.7% in June compared to the previous year, down from May's 4.1% but higher than the 2.8% recorded before the conflict in Iran began on February 28. The index was at 2.5% when Trump took office in January 2025.
The government is set to release July PCE data on Wednesday.
In terms of the labor market, consumers' perceptions improved in August, with 27% indicating that jobs were "plentiful," an increase from 24.4% in July. However, expectations for job availability over the next six months declined, with only 14.6% anticipating more jobs, down from 16.4% the previous month.
The U.S. job market unexpectedly stalled in July, with employers cutting 23,000 jobs. Additionally, Labor Department revisions removed 103,000 jobs from earlier reports for May and June.
While the unemployment rate fell to 4.1%, this was attributed to a decrease in the labor force, as many individuals exited the job market, resulting in fewer people competing for available positions.