Americans’ confidence in the U.S. economy weakened slightly in August as concerns over the job market continued to rise. The Conference Board reported that its consumer confidence index fell to 97.4, down from 98.7 in July, reflecting persistent unease about employment prospects and inflationary pressures linked to tariffs. The decline marked the eighth consecutive month of growing anxiety over labor conditions.
Confidence and Expectations
The index measuring short-term expectations for income, business conditions, and the job market slipped by 1.2 points to 74.8, well below the threshold of 80 that can signal a looming recession. Consumers’ assessments of the current economic climate also eased, dropping to 131.2 from 132.8 in July. References to inflation and high prices increased in the survey, with many respondents linking these pressures directly to tariffs.
Labor Market Concerns
Evidence of a softening job market has fueled consumer unease. U.S. employers added just 73,000 jobs in July, far short of the 115,000 expected. Revisions to May and June job data erased 258,000 previously reported gains, while the unemployment rate edged up to 4.2%. Job openings fell to 7.4 million in June from 7.7 million in May, and fewer workers are quitting their jobs, signaling waning confidence in finding better opportunities. In response to disappointing labor data, President Donald Trump dismissed Erika McEntarfer, head of the Bureau of Labor Statistics, intensifying scrutiny of the administration’s handling of economic policy.
Impact of Tariffs and Inflation
Economists warn that Trump’s sweeping tariffs on imports are beginning to filter through the economy. While consumer prices held steady between June and July, wholesale inflation surged unexpectedly, raising the likelihood of higher costs for households. Rising prices, paired with uncertainty in the job market, have heightened recession fears, with survey respondents citing the highest expectations of a downturn since April, when the latest tariff wave began.
Spending Intentions
Despite growing caution, some consumers still plan major purchases. The share of respondents intending to buy cars rose, while home-buying intentions held steady after a decline in July. Interest in purchasing appliances fell, showing wide variation across categories. Travel plans also dropped, with fewer respondents expecting to take vacations domestically or abroad in the near term.
The August consumer confidence report underscores rising concerns about the labor market, inflation, and the economic fallout from tariffs. While spending intentions remain mixed, heightened recession fears and weakening job creation highlight challenges facing the U.S. economy as policymakers weigh their next steps.