The Conference Board Consumer Confidence Index declined by 1.3 points this month to 97.4 from 98.7 in July, reflecting consumers’ rising concerns regarding stock prices, interest rates and the labor market overall.
The Present Situation Index, which considers consumers’ assessment of current business and labor market conditions, fell by 1.6 points this month, now at 131.2 The Expectations Index, which measures consumers’ short-term outlook for income, business and labor market conditions fell by 1.2 points to 74.8, likely signaling a recession in the near future.
“Consumer confidence dipped slightly in August but remained at a level similar to those of the past three months,” said Stephanie Guichard, senior economist, Global Indicators at The Conference Board. “The present situation and the expectation components both weakened.”
“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,” Guichard added. “Meanwhile, pessimism about future job availability inched up and optimism about future income faded slightly. However, these were partly offset by stronger expectations for future business conditions.”
Confidence fell for consumers under the age of 35, remained steady for those aged 35 – 55, and rose for consumers over the age of 55.
“Consumers’ write-in responses showed that references to tariffs increased somewhat and continued to be associated with concerns about higher prices,” Guichard said. “Meanwhile, references to high prices and inflation, including food and groceries, rose again in August. Consumers’ average 12-month inflation expectations picked up after three consecutive months of easing and reached 6.2% in August—up from 5.7% in July but still below the April peak of 7%.”
Consumers’ write-in responses primarily mentioned concerns regarding jobs and unemployment, stock prices (47.7% expecting stock prices to rise soon) and interest rates (54% expecting interest rates to increase).
On a more positive note, consumers’ views of Family’s Current and Future Financial Situation both improved this month. However, the share of consumers expecting a recession over the next year rose in August to the highest level since April.
While consumers’ purchasing plans for homes declined in August, that number has remained stable this month.
