Consumer Confidence Declines With Recession Fears Rising
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Americans’ view of the U.S. economy declined modestly in August as anxiety over aÌýweakening job marketÌýgrew for the eighth straight month.
The Conference Board said Aug. 26 that its consumer confidence index ticked down by 1.3 points to 97.4 in August, down from July’s 98.7, but in the same narrow range of the past three months.
The small decline in confidence was in line with the forecasts of most of the economists who were surveyed.
A measure of Americans’ short-term expectations for their income, business conditions and the job market fell 1.2 points to 74.8, remaining significantly below 80, the marker that can signal a recession ahead.
Consumers’ assessments of their current economic situation also fell modestly, to 131.2 in August from 132.8 in July.
While the unemployment and layoffs remain historically low, there has beenÌýnoticeable deterioration in the labor marketÌýthis year and mounting evidence that people are having difficulty finding jobs.
U.S. employersÌýadded just 73,000 jobs in July, well short of the 115,000 analysts expected. Worse, revisions to the May and June figures shaved 258,000 jobs off previous estimates and the unemployment rate ticked up to 4.2% from 4.1%.
That report sent financial markets spiraling, spurring President Donald Trump to fireÌýErika McEntarfer, the head of Bureau of Labor Statistics, which tallies the monthly employment numbers.
Another government report showed that U.S. employersÌýposted 7.4 million job vacanciesÌýin June, down from 7.7 million in May. The number of people quitting their jobs — a sign of confidence in their prospects elsewhere — also fell.
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More jobs data comes next week when the government releases its August job gains and June job openings reports.
The Conference Board's report said that references to high prices and inflation increased again and were often mentioned in tandem with tariffs.
Other government data this month showed that while prices at the consumer levelÌýheld fairly steadyÌýfrom June to July, U.S.Ìýwholesale inflation surgedÌýunexpectedly last month. Economists say that's a sign that Trump’sÌýsweeping taxes on importsÌýare pushing costs up and that higher prices for consumers may be on the way.
The share of consumers expecting a recession over the next year rose in August to the highest level since April, when Trump's tariff rollout began.
The share of survey respondents who said they intended to buy a car in the near future rose, while those planning to purchase a home remained stable after July’s decline.
Those saying they planned to buy big-ticket items like appliances fell, but there were big variations among product categories. Respondents who said they planned to take a vacation soon, either inside of the U.S. or abroad, also declined.
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