Theres growing concern about what the next few months will bring
of ConsumerAffairsU.S. consumer confidence fell for a second straight month in August as Americans became more pessimistic about the economys direction.
Consumers viewed current job and business conditions more favorably, but expected slower income growth and fewer employment opportunities ahead.
Prices, interest rates and household finances remain concerns, prompting consumers to reconsider some discretionary purchases and services.
Gas prices, electric bills, food prices theyre all taking a toll. Americans are feeling somewhat better about todays job market, but their confidence in the months ahead continues to deteriorate.
The Conference Boards Consumer Confidence Index declined 0.8 points in August to 89.4, down from 90.2 in July. It marked the second consecutive monthly decline, according to the organizations August Consumer Confidence Survey.
The relatively small change in the headline number masked a growing divide between how consumers view current conditions and what they expect over the next six months.
The Present Situation Index, measuring views of current business and labor market conditions, rose 6.8 points to 121.2. But the Expectations Index, which measures the outlook for income, jobs and business conditions, dropped 5.8 points to 68.2.
An Expectations Index reading below 80 has historically been associated with an increased risk of recession. However, the survey found that consumers still viewed the likelihood of a recession over the next year as relatively low.
Consumer confidence moderated slightly in August for a second consecutive month, Dana Peterson, chief economist at The Conference Board, said in a statement. She noted that improved assessments of present conditions were offset by greater pessimism about the future.
Job market looks better today, less certain tomorrow
Consumers views of the current labor market improved significantly. Twenty-seven percent said jobs were plentiful, up from 24.4% in July. Meanwhile, the share saying jobs were hard to get fell to 19.5% from 21.7%.
The outlook was less encouraging. Only 14.6% expected more jobs to become available over the next six months, down from 16.4%. More than one-quarter 26.1% expected fewer jobs.
Income expectations also weakened. The share of consumers expecting their income to increase declined to 17.6% from 19.5%, while 13.8% expected their income to fall, up from 12.6%.
The findings suggest that even consumers who feel secure today may be growing more cautious about major purchases and taking on additional debt.
Prices remain a persistent concern
When consumers were asked what was affecting their view of the economy, references to prices remained elevated. Respondents frequently mentioned oil and gasoline, while concerns about groceries, trade, jobs and international conflicts increased during August.
Both average and median inflation expectations for the next 12 months rose slightly. In addition, 61.3% of consumers expected interest rates to increase over the coming year, although that was down from 62% in July.
Higher borrowing costs can affect household budgets by making credit card balances, auto loans and mortgages more expensive. Expectations of continued inflation can also cause consumers to reduce discretionary spending, particularly if they are unsure about future income.
Confidence was highest among consumers younger than 35 and among higher-income households. Generation Z and millennials remained more confident than Generation X, baby boomers and members of the Silent Generation.
Spending plans turn more cautious
Consumers continued to show strong interest in buying cars, while homebuying expectations slipped slightly. Furniture and smartphones remained the most desired durable goods, although plans to purchase smartphones continued to moderate.
Planned spending on televisions showed the largest decline. Consumers also expected to spend less on airfare, hotels, movies, amusement parks, museums and other discretionary activities.
Restaurants, utilities and streaming, internet and mobile services remained among consumers top spending priorities. Pet-care spending also stayed relatively strong.
The results point to a consumer who has not stopped spending but is becoming more selective. That caution could matter to the broader economy because consumer spending accounts for roughly two-thirds of U.S. economic activity.
Photo By CNET
Posted: 2026-08-26 11:47:32
