📉 Consumer Confidence Declines in August
Consumer confidence dipped in August as the Consumer Confidence Index fell 1.3 points to 97.4. While not a sharp drop, it matters because consumer spending drives the U.S. economy. Headlines painted different pictures—from “sideways” to “tumbles”—but the truth is confidence is still relatively healthy, though showing early signs of pessimism.
👥 Who’s Driving the Decline? Younger Americans
The index is benchmarked at 100, reflecting consumer sentiment in 1985. Numbers below that level show greater pessimism compared to that benchmark year.
The August decline wasn’t across the board—it was concentrated among consumers under age 35. Confidence for ages 35–55 held steady, while Americans over 55 actually grew more confident.
đź”® Expectations Index and Recession Signals
The Expectations Index, which gauges consumers’ short-term outlook on income, business, and the job market, slipped 1.2 points to 74.8.
Why does that matter? Historically, when this index stays below 80, it has been a reliable signal of a potential recession within 12 months. Tariffs and inflation remain the top concerns in write-in responses, and they’re often intertwined—tariffs can put upward pressure on prices.
đź’ˇ What Investors Should Do Now
So how should you respond as an investor?
The answer hasn’t changed: stick to a long-term investment strategy. A diversified portfolio is the best defense against both good and bad economic conditions. Don’t let negative headlines trigger short-sighted decisions that could harm your future.
Securities offered through LPL Financial, Member FINRA/SIPC. Investment advice offered through Independent Advisor Alliance. Independent Advisor Alliance and GenWealth Financial Advisors are separate entities from LPL Financial.
