US consumer confidence falls to lowest level in 7 months with gas stuck above $4

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WASHINGTON (AP) — Americans’ confidence in the economy declined again this month as the ongoing conflict in Iran continued to push U.S. gasoline prices above $4 per gallon.

The Conference Board said Tuesday that its consumer confidence index dipped to 89.4 in August from 90.2 in July. That was the lowest level in seven months but was essentially within the same lukewarm range it has been in since the beginning of the year. In late 2024 and early 2025, readings were consistently above 100.

Respondents’ views of their present situation improved, but their short-term outlook 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, collected from Aug. 3 to Aug. 16, were slightly more pessimistic this month. References to prices in general—and oil and gas prices specifically—remained elevated. Comments about war and geopolitics, food prices, trade and jobs rose in August.

Trump continues to blame high prices on his predecessor, Democrat Joe Biden, yet inflation has risen since Trump’s inauguration last year.

The Federal Reserve’s preferred inflation gauge—the personal consumption expenditures price index—was up 3.7% in June from a year earlier. That was down from May’s 4.1% year-over-year increase but up from 2.8% before the Iran war began on Feb. 28. It was 2.5% when Trump was inaugurated in January 2025.

The government issues its July PCE data Wednesday.

Consumers’ views of the current labor market improved in August, with 27% saying jobs were “plentiful,” up from 24.4% in July. However, respondents were more negative about the labor market over the next six months, with just 14.6% expecting more jobs to be available, down from 16.4% last month.

The U.S. job market stalled unexpectedly in July as employers cut 23,000 jobs. To make matters worse, Labor Department revisions erased 103,000 jobs from previously reported May and June payrolls.

The unemployment rate fell to 4.1%, but for the wrong reason: Thousands of people dropped out of the labor market, leaving fewer people competing for work.