U.S. consumer confidence declined slightly in August, continuing a trend of cautious optimism amid mixed economic signals, according to new data from The Conference Board published on Aug. 26.
The organization’s Consumer Confidence Index fell by 1.3 points to 97.4 in August, down from a revised 98.7 in July. The Present Situation Index, which measures consumers’ assessment of current business and labor market conditions, decreased to 131.2 from 132.8. The Expectations Index, which reflects the short-term outlook for income, business and labor market conditions, declined to 74.8. This figure remains below 80, a level historically associated with a recession.
The report noted a continued decline in consumers’ appraisal of current job availability, which fell for the eighth consecutive month. However, this was partially offset by more favorable views of current business conditions.
“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. 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,” commented Stephanie Guichard, Senior Economist, Global Indicators at The Conference Board.
Rising Inflation Expectations and Mixed Consumer Sentiment
A key finding from the survey was a rise in inflation expectations. Consumers’ average 12-month inflation expectation increased to 6.2% in August, up from 5.7% in July, though it remains below the April peak of 7.0%.
The survey also captured shifting views on financial markets. The proportion of consumers expecting stock prices to increase over the next year fell to 47.4% from 48.9%, while those expecting a decrease rose to 30.3% from 28.1% in July. More consumers also anticipated rising interest rates.
Despite the cautious economic outlook, consumers reported a slightly more positive view of their family’s current financial situation. Paradoxically, the proportion of consumers anticipating a recession in the next 12 months reached its highest level since April.
In contrast, Australian consumer confidence surged in August, buoyed by the Reserve Bank’s third interest rate cut this year and growing optimism around household finances and the broader economy. The Westpac-Melbourne Institute’s consumer sentiment index jumped 5.7% to 98.5, marking its highest level since early 2022.
