The Conference Board Consumer Confidence Index, which measures American opinions of current economic conditions and their outlook for the next six months, rose in August to 103.3, from an upwardly revised 101.9 in July, while the Present Situation Index—based on consumers’ assessment of current business and labor market conditions—improved to 134.4 from 133.1.
The Expectations Index, based on consumers’ short-term outlook for income, business and labor market conditions, also improved in August to 82.5.
“Overall consumer confidence rose in August but remained within the narrow range that has prevailed over the past two years,” said Dana M. Peterson, chief economist at The Conference Board. “Consumers continued to express mixed feelings in August. Compared to July, they were more positive about business conditions, both current and future, but also more concerned about the labor market. Consumers’ assessments of the current labor situation, while still positive, continued to weaken, and assessments of the labor market going forward were more pessimistic. This likely reflects the recent increase in unemployment. Consumers were also a bit less positive about future income.”
Consumer assessments of their Family’s Current Financial Situation were less positive, but consumers were more optimistic for the next six months.
“In August, confidence declined among consumers under 35 while it increased for those 35 and older,” noted Peterson. “On a six-month moving average basis, confidence remained the highest among young consumers. Despite the overall improvement in the headline Index, confidence declined for consumers earning less than $25K. On a six-month moving average basis, consumers earning over $100K remained the most confident. Confidence among consumers earning $15K to $24.9K continued to trend down and was almost as low as for those earning less than $15K.
“Consumers were likely rattled by the financial market turmoil in early August, as they were less upbeat about the stock market,” she added. “In August, 46.9% of consumers expected stock prices to increase over the year ahead (down from 50.6% in July), while 27.2% expected a decrease (up from 23.1%). August’s write-in responses also included more mentions of stock prices and unemployment as affecting consumer’s views of the U.S. economy. However, consumers did not change their views about a possible recession: the proportion of consumers predicting a recession was stable and well below the 2023 peak.”
Average 12-month inflation expectations dropped to 4.9% in August, the lowest since March 2020 and consistent with slower overall inflation and declines in some goods prices. Nonetheless, mentions of prices and inflation topped write-in responses. Meanwhile, the share of consumers expecting higher interest rates over the next 12 months dropped for the third month in a row to 46.5%—the lowest since February 2024. The share expecting lower rates increased to 31.5%, the highest since April 2020.
On a six-month moving average basis, purchasing plans for homes fell to a new 12-year low, while buying plans for cars improved slightly. Buying plans for big-ticket appliances were up on average, but the increase was driven by only a few items: refrigerator, TV and washing machine. Plans to buy a smartphone or laptop/PC in the next six months increased again.
