The latest report released by the American Economic Council on August 25th revealed mixed sentiments among consumers regarding the current business environment and labor market. While satisfaction was expressed for the present circumstances, there was a lack of confidence concerning future income, business prospects, and employment opportunities. This overall assessment led to a slight decrease in consumer confidence index from July, marking the lowest point since January this year.
The data for the August report were collected from a preliminary survey conducted from August 3rd to 16th. The consumer confidence index for August was reported at 89.4, a decline of 0.8 points from July’s 90.2, making it the lowest since January 2026 when it was at 89.0. The highest point this year was recorded in April at 93.8.
According to The Conference Board, the consumer confidence index is a composite value derived from the Present Situation Index and the Expectations Index, compared against the base year average of 1985 (set at 100). A value of 89.4 in the consumer confidence index suggests consumer confidence levels reaching 89.4% of the 1985 baseline.
The report highlighted that the Present Situation Index for August, reflecting consumers’ assessment of the current business environment and job market, stood at 121.2, indicating a significant increase of 6.8 points from July. This reversal of a three-month downward trend signified consumer satisfaction with the present circumstances. Particularly noteworthy was the perception of job market opportunities, with more consumers believing in the presence of ample job opportunities compared to those perceiving scarce opportunities, with a difference of 7.5%.
However, consumers displayed a lack of optimism regarding the future outlook. The Expectations Index, which evaluates short-term outlooks on income, business conditions, and the labor market in six months, decreased by 5.8 points to 68.2, the lowest since January this year at 67.2.
Dana Peterson, Chief Economist at The Conference Board, pointed out that while consumers’ evaluation of the current business environment leaned slightly towards positivity, their outlook for the future of the business environment and labor market in the upcoming months was pessimistic. Despite a slight cooling in expectations for household income, an overall sense of optimism remained.
The American Economic Council regularly releases the authoritative Consumer Confidence Index each month. The index serves as a barometer reflecting the current business environment and the developmental trends expected in the next few months. The monthly reports also provide in-depth analysis on consumer attitudes, buying plans, vacation plans, and expectations concerning inflation, interest rates, and stock prices.
During the 2008 financial crisis until 2013, the mean consumer confidence index of The Conference Board remained below 70 points annually. In December 2008, the consumer confidence index hit a low of 38.6, with the months of February and March 2009 registering the lowest values of 25 to 26 points. Subsequently, the index gradually began to recover.
Economists caution that the consumer confidence index is just one of many economic evaluation or forecasting indices, emphasizing the importance of considering a variety of metrics for a comprehensive understanding of the economic landscape.