US Consumer Confidence Drops to 7-Month Low Amid High Gas Prices

American consumer confidence declined for the month of August, reaching its lowest point in seven months as elevated gasoline prices and the ongoing conflict in Iran continued to weigh on the economy. The Conference Board reported its consumer confidence index dropped to 89.4 from 90.2 in July.

Although respondents' assessments of their current economic situation saw a slight improvement, their outlook for the near future soured considerably. This dip follows a period of consistently higher readings in late 2024 and early 2025, indicating a significant shift in consumer sentiment. Write-in comments from the survey, collected between August 3rd and 16th, revealed increased pessimism, with specific mentions of general prices, particularly oil and gas, remaining a key concern.

Concerns about inflation, war, geopolitics, food prices, trade, and jobs were more prevalent in August. President Trump has attributed high prices to his predecessor, Joe Biden, but inflation has continued to rise since Trump's inauguration. The Federal Reserve's preferred inflation gauge, the personal consumption expenditures price index, was up 3.7% in June year-over-year, a decrease from May's 4.1% but an increase from 2.8% before the Iran war began. The government is set to release July PCE data soon.

The labor market also presents a mixed picture. While consumers' views on the current job market improved, with 27% reporting jobs as "plentiful" compared to 24.4% in July, expectations for the next six months turned more negative. Only 14.6% anticipate more job availability, down from 16.4% last month. The U.S. job market unexpectedly stalled in July, with employers cutting 23,000 jobs, and revisions erased an additional 103,000 jobs from previous months. The unemployment rate fell to 4.1%, largely due to people leaving the labor force.