Consumer confidence slips in August as job market, tariffs, and inflation weigh on outlook

U.S. consumer confidence dipped in August as concerns over the labor market, high prices, and tariffs continued to shape Americans’ economic outlook

The Conference Board reported Tuesday that its consumer confidence index fell to 97.4 in August, down from 98.7 in July. While the decline was modest and aligned with economists’ expectations, the index has remained within a narrow, weakened range over the past three months.

A closely watched measure of short-term expectations for income, business conditions, and job prospects dropped to 74.8, well below the benchmark of 80. Readings under that threshold are often viewed as a potential signal of recession risk. Assessments of current economic conditions also slipped to 131.2 in August, down from 132.8 in July.

The latest data reflects ongoing strain in the labor market. Employers added just 73,000 jobs in July, far fewer than the 115,000 analysts had projected, while revisions to May and June numbers eliminated 258,000 previously reported positions. The unemployment rate inched up to 4.2%. Additionally, job openings declined to 7.4 million in June from 7.7 million the previous month, while fewer workers chose to voluntarily leave their jobs, a traditional sign of confidence in new opportunities.

Inflation remains another pressure point for consumers and businesses. Government data indicated that while consumer-level prices held steady from June to July, wholesale inflation surged, raising concerns that higher costs could soon reach households. Analysts point to the impact of President Donald Trump’s broad tariffs on imports as a key driver of those increases.

Tariffs were frequently cited alongside inflation in the Conference Board’s report, underscoring the challenges many consumers see ahead. The share of Americans expecting a recession within the next year rose to its highest point since April, when the administration’s tariff rollout began.

Despite the unease, consumer intentions showed mixed signals for spending. Interest in purchasing vehicles rose in August, while home-buying plans remained unchanged after a July dip. Plans for appliance purchases declined, with responses varying widely by product category. Fewer consumers expressed plans to take vacations, either domestically or abroad.