Policy- US consumer confidence dropped more than expected in August, the Conference Board said.
- The fall was the biggest in two years amid persistent inflation and labor market concerns.
Americans aren't feeling great about the state of the US economy or their place in it right now.
The Conference Board reported Tuesday that its consumer confidence gauge fell to 106.1 in August, below Bloomberg estimates and a fresh three-month low. One month ago, that number stood at 114.0.
While the US has so far avoided a recession this year, Americans say they are still feeling the sting of higher interest rates and prices that are hovering above the Federal Reserve's 2% inflation target.
"Write-in responses showed that consumers were once again preoccupied with rising prices in general, and for groceries and gasoline in particular," Dana Peterson, chief economist at The Conference Board, said in a statement. "The pullback in consumer confidence was evident across all age groups — and most notable among consumers with household incomes of $100,000 or more, as well as those earning less than $50,000."
Peterson added that Americans' assessments of the present situation fell in August as employment gains slowed down and wage increases became less generous.
Consumers, too, reported that their current financial situation worsened over the last month.
The chart below shows that an increasing share of respondents said they feel "bad" about their current situation, while those who said they feel "good" decreased.
However, the share of respondents that expect a US recession in the next year ticked down in August, but remain elevated at 69.0%, The Conference Board said.
"Expectations for the next six months tumbled back near the recession threshold of 80, reflecting less confidence about future business conditions, job availability, and incomes," Peterson said. "Consumers may be hearing more bad news about corporate earnings, while job openings are narrowing, and interest rates continue to rise — making big-ticket items more expensive."
Separate data released Tuesday by the Bureau of Labor Statistics showed that job openings in the US declined to 8.83 million, the lowest mark since the start of 2021, suggesting that the labor market may finally be cooling off.