American consumers are sending mixed signals about the economy’s direction, with confidence levels stuck in a holding pattern that reflects growing unease about job prospects even as households maintain optimism about the future. The Conference Board’s Consumer Confidence Index edged down to 97.4 in August from a revised 98.7 in July, according to new analysis from Wells Fargo Economics. While the reading keeps confidence well above recession-warning levels, it also falls far short of the robust consumer sentiment that typically drives strong economic growth. The lukewarm confidence reading places consumers “roughly at the midpoint” between the 112.8 peak reached in November when economic spirits were high and the 85.7 trough following policy announcements in April. More tellingly, current confidence remains well below the 120-plus readings that characterized the pre-pandemic economic boom of 2018 and 2019.
The August data reveals a tale of two consumer mindsets: while the expectations component of the index held relatively steady at 131.2—suggesting Americans maintain hope for better times ahead—the present situation index continued its troubling descent, falling for the third consecutive month to match April’s low of 131.1. This divergence points to consumers who are “keeping a stiff upper lip” about future prospects while growing increasingly concerned about current economic conditions, particularly in the job market. The cooling employment landscape appears to be the primary driver behind flagging confidence, overshadowing other economic concerns like potential tariff impacts.
“What has got households feeling blue may have less to do with hand-wringing about trade policy and more about their own job prospects,” the Wells Fargo analysis notes.
The job market indicators embedded in the confidence survey paint an increasingly stark picture. The share of consumers who view jobs as plentiful dropped to 29.7 percent, while those finding jobs hard to get rose to 20 percent. The resulting labor differential—a key measure of employment market health—has fallen to its lowest level in approximately five years. This shift reflects broader labor market dynamics that have businesses reassessing their hiring strategies. Faced with rising costs that are difficult to pass on to consumers, companies are increasingly focused on controlling labor expenses. Recent downward revisions to earlier job creation data underscore this growing corporate caution about workforce expansion. Analysts underline that the employment concerns are beginning to reshape consumer expectations about their financial future. A rising share of Americans now expect their income to decrease—a shift that could force difficult household spending decisions if the trend continues.
The current confidence levels leave consumers in an economic no-man’s land. At 97.4, the index sits well above the 80 threshold that typically signals an impending recession, according to the Conference Board’s historical analysis. Yet it also falls short of levels associated with the kind of robust consumer spending that drives economic expansion. For businesses, this lukewarm consumer sentiment creates a challenging operating environment. Companies must navigate between rising input costs—potentially including tariff-related expenses—and consumers who may be increasingly price-sensitive as job security concerns mount. The Wells Fargo analysis suggests this dynamic creates a feedback loop where business caution about costs leads to employment market cooling, which in turn dampens consumer confidence and spending power.
“If the job market continues to cool, it gets difficult to imagine the sort of wage growth that households would need to keep up with a trend ascent in goods prices,” the report states.
The consumer confidence data adds weight to growing calls for economic stimulus measures. While the Federal Reserve’s interest rate policy and potential fiscal interventions could eventually boost confidence, such measures are “mostly a story for 2026.” In the near term, the trajectory of consumer sentiment—and by extension, economic growth—will likely depend on labor market developments. The current employment cooling may need to stabilize before consumers regain the confidence necessary to drive robust spending growth. As the economy navigates this delicate phase, consumer confidence remains a critical barometer of whether current caution evolves into broader economic weakness or eventually gives way to renewed growth momentum.
