Americans’ economic outlook cooled slightly this month as they continue to worry about the labor market, tariffs, and inflation.
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Overall consumer confidence fell by 1.3 points in August, according to a monthly survey conducted by The Conference Board, a nonprofit think tank that records consumer attitudes, buying intentions, vacation plans, and consumer expectations for inflation, stock prices, and interest rates. Consumers’ assessments of current business conditions improved slightly in August, with 22% saying business conditions were “good,” up from 20.5% in July.
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“Consumer confidence dipped slightly in August but remained at a level similar to those of the past three months,” senior economist Stephanie Guichard said in a press release.
The share of consumers expecting a recession over the next 12 months rose in August to the highest level since the April peak, the report said. However, expectations remained below the threshold that typically signals that there’s a recession ahead.
Many Americans are already seeing higher prices at the grocery store. Through June, about 22% of tariff costs have been passed onto American consumers, according to Goldman Sachs’ recent analysis. However, that number will rise to 67% if tariffs follow the same course as years prior, the firm said.
“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.”
Consumer views of the labor market cooled further in August, with 29.7% of respondents saying jobs were “plentiful,” down slightly from 29.9% in July. Twenty percent said jobs were “hard to get,” up from 18.9%. Consumer outlook for income prospects was also less positive in August, with 18.3% of respondents expecting their incomes to increase and 12.6% expecting their income to decrease.
In July, the U.S. unemployment rate reached 4.2%, the highest level since October 2021. Payrolls grew by 73,000 jobs, according to Bureau of Labor Statistics data.