Consumer confidence hits an August low as expectations crack

Consumer confidence did not collapse in August. It split. Households said the current labor market feels better than it did in July — then turned colder on the next six months for business, jobs, and income. That is how you get a mild headline drop and a loud forward signal at the same time. The Conference Board’s Aug. 25 release is the soft-data bookend before Wednesday’s PCE print and Friday’s Jackson Hole / Warsh week.

The consumer confidence print in three numbers

Released Tuesday, Aug. 25, 2026 at 10 a.m. ET:

• Headline Consumer Confidence Index: 89.4 (1985=100), −0.8 from July’s 90.2
• Present Situation Index: 121.2, +6.8
• Expectations Index: 68.2, −5.8

Second straight monthly decline in the headline. Yahoo Finance framed 89.4 as the softest reading since January. Primary source: Conference Board / PR Newswire August release and the board’s consumer confidence hub.

Dana M. Peterson, Conference Board chief economist: confidence “moderated slightly… for a second consecutive month,” with Expectations “further into negative territory” while Present Situation finally bounced after three down months.

Present Situation up, Expectations down — the real story

Ignore the 0.8-point headline if you only have room for one chart. Plot the gap.

• Present Situation ~121 vs Expectations ~68 — a ~53-point spread that says “today is fine; tomorrow is not”
• All three Expectations components worsened: net business conditions to −6.3% (−2.5 ppts); net labor outlook to −11.5% (−2.6); net income expectations still positive but softer at +3.8% (−3.1)

Rule of thumb on the Street: Expectations sustained below 80 is the caution zone for recession risk in the soft data. At 68.2 you are not debating whether the warning light is on — you are debating how much weight to give survey mood versus hard spending.

That split also explains why retail and discretionary names can still print okay comps while forward guidance turns careful. See Tuesday’s retail shock tape: Dick’s Sporting Goods stock after the Foot Locker guide cut.

Jobs feel better today, worse tomorrow

Present Situation’s labor differential — “jobs plentiful” minus “jobs hard to get” — rose 4.8 percentage points to +7.5%, reversing three months of decline and roughly recovering April levels:

• Jobs plentiful: 27.0% (from 24.4%)
• Jobs hard to get: 19.5% (from 21.7%)

Current business conditions stayed mildly positive (net “good” vs “bad” +1.3%). Looking six months out, though:

• Only 14.6% expect more jobs available (from 16.4%); 26.1% expect fewer
• 16.8% expect better business conditions; 23.1% expect worse
• Income: 17.6% expect an increase (from 19.5%); 13.8% expect a decline

Households are describing a labor market that stabilized in the rearview and looks thinner ahead — consistent with soft payroll revisions and energy-price stress that already showed up in big-box commentary.

What households named: oil, war, groceries, trade

Open-ended answers got more pessimistic. Elevated references to prices in general and oil and gas did not fade. Mentions of war/conflict, food/groceries, trade, and jobs rose in August.

That maps cleanly onto the August macro tape:

• Iran conflict / sanctions narrative and the oil run that only cracked late — see oil price August 2026 and Operation Economic Outcast
• Trade anxiety into Canada escalation — Canada retaliatory tariffs landed after much of the survey window closed (Aug. 3–16), so September’s write-ins may get louder

Yahoo’s wrap explicitly tied the softer mood to the Iran war’s energy channel and recent labor softness — not a single “vibes” story.

Inflation expectations and the rate hangover

Average and median 12-month inflation expectations ticked higher in August. Most consumers — 61.3% — still expect higher interest rates over the next year (down slightly from 62% in July). Stock-price optimism over 12 months remained intact even as confidence cooled.

That combination is awkward for the Fed narrative: households still price sticky prices and higher rates, while soft-data expectations sink. Wednesday’s PCE inflation August 2026 print is the hard check. Friday’s Warsh remarks are the communication check — Kevin Warsh Jackson Hole speech.

Autos, homes, and the services pullback

On six-month moving averages:

• Auto purchase expectations stayed strong
• Homebuying expectations dipped for the month but kept an upward trend after early-2024 decade lows
• Among durables, furniture and smartphones still topped planned buys; smartphone plans continued to moderate; TV plans fell the most
• Services spending intentions pared back after a July pop — Conference Board noted lower gas and World Cup travel as July boosters that faded into August

Top planned service categories: restaurants/bars/take-out, utilities, streaming/internet/mobile. Beauty/personal care fell. Discretionary travel categories (hotels, airfare, amusement parks, museums) softened even as pet care held up. That is a household prioritizing recurring bills and food-away-from-home over “experience” tickets — not a full freeze.

Why markets care into PCE and Warsh week

Soft confidence with a Present Situation bounce usually does not crater equities by itself. What it does:

• Supports the case that discretionary guidance stays cautious into Q4
• Keeps the bond market sensitive to any dovish surprise in PCE after last week’s long-end stress and Bessent buyback talk
• Feeds the debasement / hard-asset bid when households complain about oil and prices — parallel tape in Bitcoin price clearing $80,000 and gold price August 2026

The risk for risk assets is not 89.4. It is Expectations stuck in the 60s while oil and trade keep showing up in write-ins — then a hot PCE print that says the Fed cannot ease into that mood.

What to watch next

• Wed: July PCE — does inflation cool while confidence expectations stay ugly?
• Wed after close: NVIDIA — AI multiple vs consumer soft data in the same 24 hours
• Fri: Warsh / Jackson Hole language on real rates and fiscal plumbing
• Sept. Conference Board: do Canada tariff headlines and post-Aug. 16 oil moves show up in write-ins and Expectations?

Consumer confidence at 89.4 is a January low, not a crisis number. The message is the split: Present Situation healed a little; Expectations broke further below 80. Until that gap narrows, treat the U.S. consumer as employed enough to spend on food and utilities — and skeptical enough to cut the optional trips first.

Market commentary only. Soft-data surveys revise and re-benchmark. Not investment advice.