Americans Grow More Pessimistic About Job Market in August Amid Broader Economic Unease
NEW YORK — U.S. consumer confidence edged lower in August 2025, with Americans expressing heightened pessimism about the job market for the eighth consecutive month, according to a closely watched report from The Conference Board. The decline reflects growing concerns over employment prospects, inflation, and the economic fallout from President Donald Trump’s tariff policies, even as the overall economy shows signs of resilience with steady consumer prices and a stable unemployment rate hovering around 4%.
The Conference Board’s Consumer Confidence Index® fell by 1.3 points to 97.4 (1985=100) in August, down from a revised 98.7 in July. While the drop was modest and aligned with economists’ expectations, it marks the latest in a series of softening readings that have kept the index within a narrow range over the past three months. The Present Situation Index, which gauges consumers’ views of current business and labor market conditions, dipped 1.6 points to 131.2. Meanwhile, the Expectations Index—measuring short-term outlooks for income, business, and labor markets—declined 1.2 points to 74.8, remaining well below the 80 threshold that often precedes a recession.
“Rising worries about jobs and income offset more optimistic views of current and future business conditions,” said Stephanie Guichard, Senior Economist at The Conference Board. Consumer write-in responses highlighted an uptick in mentions of jobs and employment, with most negative comments focusing on the current labor situation, though some expressed hope for improvement. This pessimism comes despite recent labor data showing modest job growth, with employers adding 142,000 positions in August after a revised 89,000 in July, and the unemployment rate ticking down to 4.2%.
Key Drivers of Pessimism: Jobs, Tariffs, and Inflation
The job market remains a focal point of consumer anxiety. The share of Americans viewing jobs as “plentiful” has been declining steadily, reaching its lowest level since March 2021 in recent months. In August, 29.7% of consumers said jobs were “plentiful,” down slightly from 29.9% in July, while 20.0% said jobs were “hard to get,” up from 18.9%. Separately, the University of Michigan’s Surveys of Consumers reported a 5% drop in overall sentiment in August, driven by rising inflation worries and deteriorating buying conditions for durables, which hit a one-year low due to high prices. Year-ahead inflation expectations climbed to 4.9% from 4.5% in July, with long-run expectations rising to 3.9%.
Tariffs under the Trump administration are amplifying these concerns. References to tariffs in consumer responses increased, often linked to fears of higher prices. Economists note that while consumer prices held steady from June to July, wholesale inflation surged unexpectedly, signaling that import taxes are pushing up business costs that could soon filter through to households. The share of consumers expecting a recession in the next year rose to its highest level since April 2025, when the tariff rollout began.
| Metric | August 2025 | July 2025 (Revised) | Change |
|---|---|---|---|
| Consumer Confidence Index | 97.4 | 98.7 | -1.3 points |
| Present Situation Index | 131.2 | 132.8 | -1.6 points |
| Expectations Index | 74.8 | 76.0 | -1.2 points |
| Year-Ahead Inflation Expectations (Michigan Survey) | 4.9% | 4.5% | +0.4 points |
Partisan and Demographic Shifts
The dip in confidence cut across political lines, weakening among both Republicans and Democrats while remaining stable for Independents. Earlier in the year, such as in June, the decline was sharpest among Republicans amid tariff uncertainties. By age and income, the August softening was broad-based, though consumers aged 35-54 have shown the steepest drops in recent months, making them the least confident group on a six-month average.
This contrasts with July’s modest rebound, when the index rose 2 points to 97.2 as concerns about the economy and labor market eased slightly. However, perceptions of current job availability hit a nearly 4.5-year low that month, signaling persistent underlying worries.
Broader Economic Context and Implications
Despite the gloom, the U.S. economy continues to grow, with low unemployment and steady job additions providing a buffer. The Federal Reserve’s recent half-point interest rate cut to combat inflation—bringing the benchmark to 4.8%—aims to support the labor market, though consumers’ inflation expectations remain elevated. Big-ticket purchase intentions, such as for homes and vehicles, have cooled amid high mortgage rates and house prices, though affordability is improving in some markets with slowing price growth.
For American households and businesses, this growing pessimism could curb spending, which drives about 70% of the economy. Retailers and manufacturers are already adjusting to tariff-related cost hikes, with some consumers planning to cut back on nonessentials or switch to lower-priced options. McKinsey’s ConsumerWise research from earlier in 2025 noted that tariff announcements led to a 32% drop in net sentiment, pushing inflation and trade barriers to the top of consumer concerns.
Economists view the August dip as a continuation of a cautious trend rather than a sharp downturn. “Consumers are no longer bracing for the worst-case scenario feared in April,” noted the Michigan survey, but expectations for higher unemployment and inflation persist. As the Trump administration’s policies evolve, including potential expansions of tariffs, monitoring labor data will be crucial. A sustained weakening in job market sentiment could heighten recession risks, prompting the Fed to consider further rate adjustments. For now, the narrow confidence range suggests the economy is rebalancing rather than crashing, but American workers’ unease signals challenges ahead in maintaining momentum.