Americans have become more pessimistic about economic prospects

Consumer confidence in the US fell for the second consecutive month in August and hit a seven-month low. Americans have become more pessimistic about the near-term outlook for the economy and labor market.

The Conference Board Consumer Confidence Index decreased to 89.4 in August from a revised 90.2 in July. That is the lowest since January.

The main factor behind the deterioration was a decline in future expectations. The index, which reflects consumers' outlook for income, business activity, and the labor market over the next six months, fell 5.8 points to 68.2.

By contrast, the assessment of current economic conditions improved. The corresponding index rose 6.8 points to 121.2, breaking three months of declines. Americans, in particular, gave a slightly better rating to the current labor market.

Americans worried about prices and jobs

In survey responses, high prices, especially for oil and gasoline, as well as food were mentioned more often. There was also an increase in mentions of war and international conflicts, trade, and the job situation.

According to Dana Peterson, chief economist at The Conference Board, consumers have become more pessimistic about the outlook for business and the labor market, and expectations for income growth also worsened, although they remain generally positive.

Consumer confidence is one of the indicators of future household spending, which plays a key role in the US economy. Its deterioration may point to more cautious consumer behavior in the coming months.

Based on: The Conference Board