US Consumer Confidence Drops to Seven Month Low in August

US consumer confidence fell to its lowest point in seven months in August 2026, driven down by high gasoline prices caused by the ongoing conflict in Iran. The Conference Board reported Tuesday that its consumer confidence index decreased to 89.4 from 90.2 in July.

Although sentiment regarding present conditions showed minor improvement, short-term economic expectations degraded among survey respondents. Persistent inflation over the past five years continues to weigh heavily on consumer sentiment, presenting economic challenges ahead of upcoming midterm elections.

Write-in responses to the survey, collected between August 3 and August 16, highlighted heightened consumer frustration regarding food costs, job security, geopolitical friction, and sustained elevated energy prices. The Federal Reserve's preferred measure of inflation—the personal consumption expenditures index—showed a 3.7% year-over-year increase in June, up from pre-war levels of 2.8% recorded before the Iranian conflict began in February.

Labor market perceptions presented a mixed picture. While 27% of respondents rated current job availability as "plentiful"—an increase from 24.4% in July—optimism regarding future employment softened, with only 14.6% anticipating more jobs over the next six months compared to 16.4% previously.

The underlying employment market faced headwinds in July as employers cut 23,000 jobs, alongside Labor Department revisions that removed 103,000 positions from earlier reports for May and June. The official unemployment rate dropped to 4.1%, primarily due to individuals leaving the workforce rather than increased hiring.