Key facts
- American consumer confidence fell in July to 90.8 from 92.2 in June.
- Rising gas prices, driven by the U.S.-Iran conflict, contributed to the decline.
- The average U.S. gas price is now $4.10 per gallon.
- Inflation has accelerated, impacting Americans' real incomes.
- Grocery prices have seen a substantial increase, with ground beef prices up 79% since early 2019.
- US employers added 57,000 jobs last month, a significant decrease from the prior month.
Americans' confidence in the U.S. economy has declined in July, with the Conference Board's consumer confidence index falling to 90.8 from 92.2 in June. This dip follows a modest improvement in June when gas prices had decreased. However, escalating conflict in the Middle East, particularly between the U.S. and Iran, has caused gas prices to resume their climb, reaching an average of $4.10 per gallon.
The conflict, which began after an attack in late February, led Iran to shut down the Strait of Hormuz, impacting global oil supply and accelerating inflation. This has resulted in a decline in Americans' inflation-adjusted incomes. Consumers also expressed pessimism regarding grocery prices, which have risen significantly, with ground beef prices seeing a 79% increase since early 2019.
In the labor market, U.S. employers added only 57,000 jobs last month, a sharp decrease from the previous month. The unemployment rate fell to 4.2% from 4.3%, though this was partly due to individuals no longer actively seeking employment.
While mentions of war and geopolitics in consumer responses decreased slightly, the Board anticipates these references may increase in future surveys due to the recent escalation.