Consumer Confidence Slips Again, Future Outlook Darkens

The Conference Board’s Consumer Confidence Index fell 0.8 points to 89.4 in August, down from 90.2 in July, based on a survey conducted between August 3rd and August 16th. The decline marks the second consecutive monthly drop, though the headline figure masks a sharper divergence beneath the surface. While consumers grew somewhat more upbeat about present conditions, their outlook for the next six months deteriorated further into territory the Conference Board itself associates with recession warnings. Write-in comments from survey respondents also turned more pessimistic, with persistent references to elevated gas and food prices, alongside a rise in mentions of war, trade, and jobs.

The Present Situation Index, which measures how consumers view current business and labor conditions, rose 6.8 points to 121.2, snapping three straight months of decline. Views on the labor market drove much of that improvement, with 27.0% of consumers calling jobs “plentiful,” up from 24.4% in July, and those saying jobs are “hard to get” falling to 19.5% from 21.7%. 

That pessimism showed up clearly in the Expectations Index, which dropped 5.8 points to 68.2. Only 14.6% of consumers expect more jobs to be available in six months, down from 16.4%, while 26.1% expect fewer jobs, up from 25.3%. Expectations for business conditions softened in similar fashion, and income expectations followed suit, with just 17.6% of consumers anticipating higher income over the next year, down from 19.5%. The broader trend suggests households are bracing for a rougher stretch ahead rather than a smoother one, a tension consistent with the Fed’s own contradictory mandate.

Perhaps most notable for those watching inflation trends, 61.3% of consumers still expect higher interest rates over the next 12 months, only a modest decline from 62% in July. Twelve-month inflation expectations ticked up slightly as well, even as policymakers and much of the financial commentary continue to suggest inflation is being brought under control. That gap between official narratives and household expectations has shown up repeatedly in recent economic data, mirroring patterns seen when Canada’s inflation accelerated past central bank comfort zones, and it appears again here. Family financial perceptions also softened after improving in July, and the share of consumers who see a recession as “very likely” within the next year increased slightly, though the overall probability remains low. By political affiliation, confidence among Independents and Republicans declined while Democrats reported somewhat higher confidence.

Against this backdrop of mixed signals and lingering inflation worry, gold touched an intraday high of $4,667.00 per ounce on the Monday before the report’s release, trading in a $29.40 range. The metal’s continued strength suggests that, whatever comfort policymakers take from softer headline inflation figures, a meaningful share of market participants remain unconvinced that price pressures are truly fading, a skepticism echoed by the rapid growth in the money supply. Taken together, August’s confidence data point to a public more uncertain about the months ahead than the headline number alone would suggest.