U.S. consumer confidence remained little changed in August, with deteriorating outlooks for inflation and employment offset by optimism in future business conditions.
The Consumer Confidence Index dipped slightly in August to 97.4, down from 98.7 in July (revised up by 1.5 points), according to survey results released Tuesday by the nonprofit think tank and research group The Conference Board.
The monthly survey reflects consumer attitudes on the state and trajectory of U.S. economic conditions. The survey’s Present Situation Index, which gauges consumer confidence in current business and labor market conditions, fell 1.6 points to 131.2.
“Notably, consumers’ appraisal of current job availability declined for the eighth consecutive month, but stronger views of current business conditions mitigated the retreat in the Present Situation Index,” commented The Conference Board’s senior economist for global indicators, Stephanie Guichard, in Tuesday’s press release.
Confidence in economic conditions fell for consumers under 35 years old, remained stable for consumers aged 35 to 55, and rose for consumers over 55, the August survey results showed. Guichard added that overall pessimism concerning future job availability inched up, while optimism about future income faded slightly.
Tuesday’s release marks the first Conference Board survey to be published since the U.S. Bureau of Labor Statistics slashed May and June’s U.S. payroll additions by a combined 258,000 jobs. Hiring in July proved weaker than expected, with just 73,000 jobs added compared to economists’ consensus estimates of 110,000.
The survey’s Expectations Index, which reflects consumers’ short-term economic outlook, decreased 1.2 points to 74.8 in August, remaining below the threshold of 80 that typically signals a recession ahead, according to The Conference Board.
After three months of easing inflation fears, consumers’ average 12-month inflation expectations rose to 6.2% in August, up from 5.7% in July.
“Consumers’ write-in responses showed that references to tariffs increased somewhat and continued to be associated with concerns about higher prices,” explained Guichard.
While the forward-looking price impacts of the Trump administration’s tariff policies remain uncertain, July’s 0.9% jump in the producer price index, which measures wholesale costs of goods and services before they reach the consumer, suggests looming consumer price hikes ahead.
Purchasing plans for homes “remained stable” in August after July’s decline, the survey found, while purchasing plans for new and used cars rose. Respondents indicated a pullback on plans for discretionary spending on activities like dining out and entertainment, with vacation intentions also falling for a second consecutive month.
The August steadying in consumer confidence noted by The Conference Board somewhat contrasts that registered by the University of Michigan’s index of consumer sentiment, which dipped 5% from July to August. However, the university’s director of Surveys of Consumers, Joanne Hsu, noted similar concerns as Guichard’s among survey respondents.
“Overall, consumers are no longer bracing for the worst-case scenario for the economy feared in April when reciprocal tariffs were announced and then paused,” commented Hsu. “However, consumers continue to expect both inflation and unemployment to deteriorate in the future.”