US consumer confidence hits lowest level in seven months as gas prices remain elevated

Open this photo in gallery:Americans remain frustrated with the economy after five years of elevated inflation, potentially posing a risk to President Donald Trump and Republicans in the midterm electionsEllen Schmidt/The Associated PressAmericans’ confidence in the economy declined again this month as the ongoing conflict in Iran has steadily pushed gasoline prices above US$4 per gallon in the U.S.The Conference Board said Tuesday that its consumer confidence index dipped to 89.4 in August from 90.2 in July. That’s the lowest level in seven months but essentially in the same lukewarm range its been in since the beginning of the year. In late 2024 and early 2025 the readings were consistently above 100.Respondents’ views of their present situation improved, but their outlook for the near-term future soured.Americans remain frustrated with the economy after five years of elevated inflation, potentially posing a risk to President Donald Trump and Republicans in the midterm elections, which are less than 70 days away.Write-in responses to the board’s survey, which were collected from Aug. 3 to Aug. 16, were slightly more pessimistic this month. References to prices in general, specifically oil and gas specifically, remain elevated. Comments about war and geopolitics, food prices, trade, and jobs rose in August.Trump continues to blame the high prices on his predecessor, Democrat Joe Biden, yet inflation has risen since Trump’s inauguration last year.The government’s measure of inflation that the Federal Reserve prefers – personal consumption expenditures – came in at 3.7 per cent in June, down from May’s year-over-year increase of 4.1 per cent, but up from 2.8 per cent before the Iran war began Feb. 28. It was 2.5 per cent when Trump was inaugurated in January 2025.The government issues its July PCE data on Wednesday.Consumers’ views of the current labour market improved in August, with 27 per cent of consumers saying jobs were “plentiful,” up from 24.4 per cent in July. However, they were more negative about the labour market going forward in the next six months, with just 14.6 per cent of respondents expecting more jobs to be available. That’s down from 16.4 per cent last month.The U.S. job market stalled unexpectedly in July as employers cut 23,000 jobs. To make matters worse, Labor Department revisions slashed 103,000 jobs from May and June payrolls.The unemployment rate fell to 4.1 per cent, but for the wrong reason: Thousands of people dropped out of the labour market, so fewer people were competing for work.