In August, the Conference Board Consumer Confidence Index decreased by 0.8 points to 89.4, below the 100 break-even point between positive and negative sentiments, down from 90.2 in July.
The Present Situation Index, based on consumer assessments of current business and labor market conditions, gained 6.8 points to 121.2, following three consecutive months of decline. However, the Expectations Index, based on consumers’ short-term outlooks on income, business and labor market conditions, fell by 5.8 points to 68.2.
On a six-month moving-average basis, homebuying expectations declined slightly in August but remained on an upward trend after slumping to decade lows in early 2024. Among consumer-planned durable goods purchases within six months, furniture and smartphones were the most desired items, but smartphone expectations continued to moderate in August. Plans to spend on televisions fell the most on a six-month moving-average basis, while intentions to buy most other durable goods moderated slightly. Auto purchasing expectations remained strong, according to the Conference Board.
Consumers’ net views of their Family’s Current Financial Situation softened slightly in August after improving in July, as the share of consumers who said their finances were bad rose. Views on Family’s Future Financial Situation remained healthy, the Conference Board added, but were slightly less optimistic versus June and July. Although the share of consumers who said a recession in the United States over the next 12 months is very likely increased a bit, consumers still said they felt the likelihood was low.
In the Present Situation reading of views on current business conditions, 18.9% of consumers said business conditions were good, down from 19.1% in July, and 17.6% said business conditions were bad, down from 17.9%. In considering the labor market, 27.0% of consumers said jobs were plentiful, up from 24.4% in July, while 19.5% said jobs were hard to get, down from 21.7%.
As for the Expectations Index, based on views on prospects six months out, 16.8% of consumers expected business conditions to improve, down from 17.8% in July, while 23.1% expected business conditions to worsen, up from 21.6%. In looking at the labor market, 14.6% of consumers expected more jobs to become available, down from 16.4% in July, even as 26.1% anticipated fewer jobs, up from 25.3%.
In thinking about their income prospects in August, 17.6% of consumers expected their income to increase, down from 19.5% in July, while 13.8% expected their income to decrease, up from 12.6%.
On a six-month moving-average basis, confidence across all age groups trended downward somewhat, remaining highest among consumers under 35. By income, confidence was mixed, but in general, higher-income groups were more optimistic. By generation, confidence among Gen Zers remained the highest, followed closely by Millennials on a six-month moving average basis, the Conference Board indicated. As a group, Gen X, Baby Boomers and the Silent Generation trailed in confidence by a wider margin. The consumer average and median 12-month inflation expectations grew slightly in August, with 61.3% of consumers anticipating higher interest rates, down moderately from 62% in July. At the same time, consumers expected higher stock prices a year from now.
Anticipated spending on services slipped in August after an increase in most discretionary activities in July, as lower gas prices and the summer’s World Cup likely boosted the desire to spend, the Conference Board observed. Still, it added, consumers planned to spend more overall on services over the next six months. Among all service categories, restaurants/bars/take-out, utilities and streaming/internet/mobile services ranked among the top three spending targets, although spending on beauty and personal care fell. Beyond the top three, consumers intended to spend less on certain activities within the next six months, including movies, hotels for personal travel, airfare, amusement parks, museums and historical sites. Spending plans for pet care remained strong, the Conference Board maintained.
Consumer write-in responses on factors affecting the economy in August grew slightly more pessimistic. References to prices in general and to oil and gas specifically remain elevated. Comments about war/conflict, food/groceries, trade and jobs rose in August.
“Consumer confidence moderated slightly in August for a second consecutive month,” said Dana Peterson, Conference Board chief economist. “The Expectations Index slipped further into negative territory, which was offset by a moderate rise in the Present Situation Index after declining in the past three months. Consumer appraisals of current business conditions were mildly positive. Perceptions of the current labor market improved, reversing three months of moderate decline. Looking ahead, consumers were more pessimistic about business conditions and the labor market over the next six months. Expectations for household incomes moderated but remained optimistic overall.”
