Full Breakdown
U.S. Consumer Confidence Drops to Seven-Month Low Amid Iran-Driven Gasoline Prices
8/26/2026, 6:15:52 AM
Core Event
The Conference Board reported that the U.S. consumer confidence index fell to 89.4 in August, down 0.8 points from July’s 90.2. This is the lowest reading in seven months and places confidence within the weak range that has persisted throughout much of 2026. The decline was recorded in the survey conducted from August 3 to 16.
Background & Context
The United States has faced elevated gasoline prices above $4 per gallon since the conflict with Iran intensified after the war began on February 28. Higher fuel costs have amplified household budget pressures, contributing to a broader pessimism about inflation and the economic outlook. Earlier in the year, confidence readings were consistently above 100 in late 2024 and early 2025, but they have since slipped as the war-related price shock persisted.
Data & Statistics
- Present Situation Index: rose 6.8 points to 121.2, marking the first increase in three months.
- Expectations Index: fell 5.8 points to 68.2, the lowest since January.
- Job Perceptions: 27 % of respondents said jobs were “plentiful” in August, up from 24.4 % in July; only 14.6 % expected more jobs to be available six months ahead, down from 16.4 % in July.
- Interest-Rate Expectations: 61.3 % of consumers anticipate higher rates over the next 12 months.
- Inflation Gauge: The Federal Reserve’s preferred personal consumption expenditures (PCE) price index was up 3.7 % year-over-year in June, down from 4.1 % in May but above the 2.8 % level recorded before the Iran war.
- Labor Market: The unemployment rate fell to 4.1 %, partly because thousands left the labor force; employers cut 23,000 jobs in July, and Department of Labor revisions removed 103,000 jobs from May and June payroll reports.
Official Statements & Responses
President Donald Trump attributed the high gasoline prices to his predecessor, stating that the administration of Joe Biden is responsible for the cost surge. The Conference Board’s chief economist, Dana M. Peterson, noted that while consumers view current business conditions more positively, their outlook for the next six months remains markedly pessimistic. The government announced that the July PCE data will be released on an upcoming Wednesday, providing further insight into inflation trends.
Verbatim Quotes
- “Consumer confidence moderated slightly in August for a second consecutive month,” — Dana M. Peterson, chief economist at the Conference Board
What’s Next
The decline in confidence comes less than 70 days before the midterm elections, adding an economic dimension to the political contest for President Trump and Republican candidates. The upcoming release of July’s PCE data will be closely watched for signs of inflationary pressure, which could influence both consumer sentiment and monetary-policy decisions in the weeks ahead.
*All figures and statements are drawn from the Conference Board’s August 2026 consumer confidence survey and related economic reports.*
