American consumers say they feel better about today than they have in months — and worse about what comes next than at almost any point this year. The Conference Board's Consumer Confidence Index slipped 0.8 points to 89.4 in August, a second straight monthly decline and the weakest reading since January, the organization said Tuesday.
The headline number understates how sharply the two halves of the survey diverged.
A Split Between Now and Next
The Present Situation Index, which measures how consumers assess current business and labor conditions, jumped 6.8 points to 121.2 — its first improvement in four months. The Expectations Index, covering the six-month outlook for income, business, and jobs, fell 5.8 points to 68.2.
That gap matters because of where the second number sits. The Conference Board has long flagged that an Expectations reading below 80 is "generally associated with a recession within the next year." August marks a further slide into that zone, not a brush with it.
"Consumer confidence moderated slightly in August for a second consecutive month," said Dana M. Peterson, Chief Economist at The Conference Board. "The Expectations Index slipped further into negative territory."
The forward-looking detail is uniformly soft. Just 16.8% of respondents expect business conditions to improve over the next six months, against 23.1% who expect them to worsen. On jobs, 14.6% anticipate more positions becoming available while 26.1% expect fewer — a near two-to-one negative skew.
The Labor Market Consumers Can See
Current labor conditions tell the opposite story. The share of consumers describing jobs as "plentiful" rose to 27.0% from 24.4%, while those calling jobs "hard to get" fell to 19.5% from 21.7%. The resulting labor differential widened 4.8 percentage points to +7.5%.
The read-through: households are not describing a job market that has broken. They are describing one they expect to break.
Gas, Prices, and the Iran Premium
Survey write-ins point to the pressure point. Respondents mentioned prices in general — and oil and gasoline specifically — more often than in July, alongside rising references to armed conflict, geopolitical tension, food costs, and trade policy.
Gasoline has held above $4 a gallon through August, a consequence of the Iran conflict that began in late February. Headline PCE inflation has run at 3.7% year over year as of June, up from a 2.8% pre-conflict baseline. Consumers now expect 5.8% inflation over the coming year, up from 5.6% in July, and 61.3% anticipate higher interest rates ahead.
Markets Looked Past It
Equities did not flinch. The S&P 500 closed Tuesday at 7,677.20, up 0.32%, with the Dow adding 160 points to 53,577.17 and the Nasdaq gaining 0.66% to 26,151.30. Treasury yields eased, the 10-year falling five basis points to 4.64%. Gold rose 0.52% to $4,722 an ounce while WTI crude sank 4.05% to $81.57.
The divergence is the story. Markets are trading current conditions. Consumers are pricing the forecast — and one of these groups is usually early.
Sources: The Conference Board (August 2026 Consumer Confidence Survey press release), Reuters, Bloomberg, Transport Topics, Yahoo Finance