Full Breakdown
U.S. Consumer Confidence Slides to Seven-Month Low as Gas Prices Surge Amid Iran Conflict
8/25/2026, 8:23:52 PM
Consumer Confidence Drops in August
The Conference Board reported that its consumer confidence index fell to 89.4 in August, down from 90.2 in July. This marks the lowest reading in seven months, though the figure remains within the modest range the index has occupied since the start of the year. Survey responses collected in early-to-mid August showed a slight increase in respondents’ assessment of their current financial situation, but a sharper decline in short-term outlook.
Economic Indicators Behind the Decline
Respondents cited elevated gasoline prices—above $4 per gallon—and the ongoing conflict in Iran as primary concerns. The Federal Reserve’s preferred inflation gauge, the personal consumption expenditures (PCE) price index, was up 3.7 % year-over-year in June, down from a 4.1 % rise in May but higher than the 2.8 % level recorded before the Iran war began in late February. The same PCE data is scheduled for release later in August.
Labor-market sentiment showed mixed signals. While 27 % of respondents described jobs as “plentiful” in August, up from 24.4 % in July, only 14.6 % expected more jobs over the next six months, a drop from 16.4 % the prior month. The U.S. job market stalled in July, with employers cutting 23,000 jobs and Labor Department revisions removing 103,000 jobs previously reported for May and June. The unemployment rate fell to 4.1 %, a decline attributed to workers exiting the labor force rather than new hiring.
Official Reactions
President Donald Trump continued to attribute high gasoline prices to his predecessor, Democrat Joe Biden, despite inflation having risen since Trump’s inauguration in January 2025. The Conference Board’s release highlighted the link between price pressures, geopolitical tensions, and consumer sentiment. Federal Reserve officials have not altered policy guidance but note that the June PCE figure remains above the central bank’s longer-term target.
Political Implications
The dip in consumer confidence arrives less than 70 days before the midterm elections, raising concerns for President Trump and Republican candidates. Persistent inflation and volatile energy costs could influence voter perceptions of the administration’s economic stewardship, potentially affecting electoral outcomes.
