Consumer sentiment in the United States declined in August, following a weaker-than-anticipated jobs report and growing concerns over newly implemented tariffs under former President Donald Trump.
According to The Conference Board, the consumer confidence index dropped by 1.3 points to 97.4 this month.
Survey respondents cited rising prices, employment uncertainty, and the impact of trade policies as key factors influencing their outlook.
Economic perceptions often shape political dynamics, with voters frequently prioritizing financial stability when evaluating leadership. Public sentiment on economic conditions can significantly affect policy decisions and electoral outcomes.
The Bureau of Labor Statistics reported that the U.S. economy added 73,000 jobs in July, falling short of the 100,000 or more that many economists had forecast.
Earlier in August, tariffs of at least 10% on goods from over 60 countries went into effect after months of postponements. Trump celebrated the move on Truth Social, writing: “IT’S MIDNIGHT!!! BILLIONS OF DOLLARS IN TARIFFS ARE NOW FLOWING INTO THE UNITED STATES OF AMERICA!”
The monthly consumer confidence survey assesses public sentiment on inflation, interest rates, stock markets, spending intentions, and vacation plans.
Dr. Clement Bohr, a senior economist at the UCLA Anderson Forecast, told Newsweek that confidence initially plunged when tariff plans were first announced but began to stabilize as immediate impacts were not felt.
“Now, as people start experiencing these effects in their daily lives—not just hearing about them—the index is declining again,” Bohr explained.
The drop was most pronounced among individuals under 35, while confidence remained steady for those aged 35 to 55 and improved slightly for those over 55.
The Present Situation Index, reflecting views on current business and labor conditions, fell by 1.6 points. The Expectations Index, which gauges short-term outlooks on income and employment, decreased by 1.2 points.
The share of respondents anticipating a recession within the next 12 months reached its highest level since April.
“There’s been a growing gap between survey results and actual economic indicators,” Bohr noted. While such sentiment data remains relevant, he added that many economists, himself included, are placing less emphasis on it than in previous years.
Interestingly, perceptions of personal financial health—both current and future—showed improvement.
Alex Jacquez, Chief of Policy and Advocacy at Groundwork Collaborative, commented: “Consumer confidence remains below the threshold typically associated with an impending downturn. People expect prices to rise again after a brief reprieve, job market optimism is fading, and fears of a recession are mounting. No amount of dismissed experts can mask the economic realities consumers are facing.”
Bohr also highlighted that historically, when the Expectations Index falls below 80, it has reliably signaled a recession within the following year.
Stephanie Guichard, Senior Economist at The Conference Board, noted in a press release that mentions of tariffs in open-ended responses increased and were frequently linked to worries about higher costs. Concerns about inflation, particularly in food and groceries, also rose in August.
The next consumer confidence report is scheduled for release on September 30.
Do you have a story that Newsweek should be covering? Contact LiveNews@newsweek.com.
Update 8/26/25, 4:40 p.m. ET: This article was updated with comment from Dr. Clement Bohr.
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Donald Trump Gets Economic Warning Sign From Consumers
Consumer confidence in the United States fell in August after a weaker-than-expected jobs report and amid President Donald Trump ‘s new tariffs. n nThe consumer confidence index declined 1.3 points to 97.4 in August, The Conference Board said. n nWhy It Matters n nConsumers surveyed referenced concerns about tariffs, high prices and employment, according to the business research organization The Conference Board. n nThe economy and voters view on it can play a major role in political clout carried by the president and lawmakers. The economy is often cited as one of the top issues for voters and public perception on the issue can heavily influence policy proposals and elections. n nWhat To Know n nThe Bureau of Labor and Statistics said the U.S. added 73,000 in the month of July. Most economists had projected job gains of at least 100,000 in July, according to The Hill. n nEarlier this month, new tariffs of 10 percent or higher on goods from more than 60 countries took effect after months of delays and extensions. n
“IT ‘S MIDNIGHT!!! BILLIONS OF DOLLARS IN TARIFFS ARE NOW FLOWING INTO THE UNITED STATES OF AMERICA!” Trump wrote on Truth Social on August 6. n nThe consumer confidence survey is a monthly report detailing consumer attitudes, buying intentions, vacation plans and expectations for inflation, stock prices and interest rates. n nDr. Clement Bohr, a senior economist with the UCLA Anderson Forecast, told Newsweek that the consumer confidence index took a “huge drop” when Trump first planned to impose the tariffs, but started recovering after consumers did not see immediate effects. n n”Now, when people are also really not just hearing about these things that they did early on, but actually now they ‘re really seeing it in their own day to day lives, the survey index is starting to dive a bit again,” Bohr said. n nConfidence fell for consumers under the age of 35, remained stable for consumers aged 35 to 55, and rose for consumers over 55, according to The Conference Board. n nThe present situation Index, which is based on consumers ‘ opinions of current business and labor market conditions, fell 1.6 points this month. The expectations index, which is based on consumers ‘ short-term outlook for income, business and labor market conditions, decreased by 1.2. n nThe number of consumers expecting a recession over the next 12 months increased to the highest level since a peak in April. n n”We have seen more of a disconnect between these survey sentiment measure and what the state of the actual economy is,” Bohr said. n nBohr said the surveys are still important, but “I, and I think I speak for many other economists, are giving them less weight than what we have in the past.” n nConsumers ‘ view of their family ‘s current and future financial situations both improved. n nWhat People Are Saying n nAlex Jacquez, Chief of Policy and Advocacy at Groundwork Collaborative, told Newsweek: “Consumer confidence is still well below the number that generally indicates an upcoming recession. Consumers expect prices to go up again after several months of easing, labor market expectations are souring, and recession fears are on the rise. No matter how many economic experts President Trump fires, he can ‘t hide the bad economic news from consumers.” n nDr. Clement Bohr, a senior economist with the UCLA Anderson Forecast, speaking about the expectations index to Newsweek: “Whenever that ‘s been below 80, that ‘s been a good signal of a coming recession over the next year. So based on historical patterns, that would suggest that one is coming, and therefore a lot of people are fearing a recession.” n nStephanie Guichard, Senior Economist, Global Indicators at The Conference Board, in a press release: “Consumers ‘ write-in responses showed that references to tariffs increased somewhat and continued to be associated with concerns about higher prices. Meanwhile, references to high prices and inflation, including food and groceries, rose again in August.” n nWhat Happens Next n nThe next monthly consumer confidence survey is scheduled for release on September 30. n nDo you have a story that Newsweek should be covering? Do you have any questions about this story? Contact LiveNews@newsweek.com. n nUpdate 8/26/25, 4:40 p.m. ET: This article was updated with comment from Dr. Clement Bohr.