Low expectations index may signal a looming recession
of ConsumerAffairsAugust 26, 2025
- Index edges lower: The Conference Board Consumer Confidence Indexfell 1.3 points in August to 97.4, as views on jobs and incomes weakened.
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Recession signal: Expectations Index stayed below 80, a threshold that often signals a looming recession.
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Inflation concerns: Write-in responses showed growing worries about tariffs, high prices, and rising inflation expectations.
U.S. consumer confidence slipped modestly in August as concerns about job prospects and household income outweighed more optimistic views of business conditions, according to new data from The Conference Board.
The Consumer Confidence Index fell to 97.4 this month, down from 98.7 in July. The Present Situation Index, reflecting consumers view of current business and labor market conditions, dropped to 131.2. The Expectations Index, which tracks the short-term outlook for income, jobs, and business conditions, fell to 74.8remaining under the level of 80 that often foreshadows a recession.
Labor market concerns mount
Consumer confidence dipped slightly in August but remained at a level similar to those of the past three months, said Stephanie Guichard, senior economist at The Conference Board. She noted that consumers appraisal of job availability declined for the eighth straight month, even as assessments of current business conditions improved.
Expectations for the labor market also weakened. Nearly 27% of respondents said they expect fewer jobs to be available in the next six months, up from 25% in July. Optimism about future income also slipped, with fewer consumers expecting raises and more anticipating declines.
Inflation expectations rise again
Consumers reported growing concerns about prices, particularly food and groceries, as mentions of inflation and tariffs increased in survey responses. Average 12-month inflation expectations rose to 6.2% in August from 5.7% in July, reversing three months of easing.
Confidence levels varied across demographics: sentiment fell among those under 35, held steady for people 35 to 55, and improved among those over 55. By political affiliation, confidence weakened for Republicans and Democrats but was little changed for Independents.
Spending intentions mixed
Purchasing plans shifted in August, with buying intentions for both new and used cars rising, while intentions for TVs and tablets fell. Consumers plans to travel, dine out, and spend on entertainment also softened. Non-discretionary spending plans, such as for financial services and home or car maintenance, improved slightly.
The survey, based on an online sample conducted by Toluna, closed August 20.
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