- KPI – August 2026: The Brief
- KPI – August 2026: State of Manufacturing
- KPI – August 2026: State of Business – Automotive Industry
- KPI – August 2026: State of the Economy
- KPI – August 2026: Recent Vehicle Recalls
Below is a synopsis of consumer sentiment, confidence, demand and income/spending trends.
In July, the Consumer Price Index for All Urban Consumers (CPI-U) increased 0.1% on a seasonally adjusted basis after falling 0.4% in June, according to the U.S. Bureau of Labor Statistics. Over the last 12 months, the all-items index increased 3.4% before seasonal adjustment.
Data show the index for shelter edged up 0.1% in July, accounting for roughly two-thirds of the monthly all-items increase. The index for food also increased 0.1% month-over-month, as the index for food-away-from-home increased 0.3%. In contrast, the energy index declined 1.5%.
The index for all-items-less-food-and-energy rose 0.2% after being unchanged in June. Indexes that increased month-over-month include medical care, airline fares, communication, education and recreation. Motor vehicle insurance was among the major indexes to decrease.
The all-items index rose 3.4% year-over-year, after rising 3.5% a month ago. The all-items-less-food-and-energy index increased 2.5% year-over-year. The energy index increased 14.7% year-over-year, while the food index increased 3%.
Sentiment
The University of Michigan Survey of Consumers—a survey consisting of approximately 50 core questions covering consumers’ assessments of their personal financial situation, buying attitudes and overall economic conditions—registered 55.2 in July and posted a preliminary reading of 51.0 in August.
“Consumer sentiment fell about 8% this August, ending two consecutive months of improvement. While views of personal finances saw only minor declines, expected business conditions sank 11% for the short run and 17% for the long run,” says Joanne Hsu, director at Survey of Consumers.
Data shows the decrease in sentiment was seen across the political spectrum, with Republicans exhibiting the strongest month-to-month decline in August. Sentiment among Republicans is now 19% below readings just prior to the Iran conflict and the lowest since the 2024 election.
Although the early-month weakening in sentiment was pervasive across various demographic groups, large reductions were recorded among older consumers, lower-income consumers and those without a college degree.
“These groups are all particularly vulnerable to any erosion of purchasing power stemming from inflation. Across all consumers, only 8% expect their income growth to exceed inflation in the year ahead, down from 18% in December 2024, a reflection of the belief that high prices will continue to be burdensome,” Hsu says.
Key Takeaways, Courtesy of Survey of Consumers:
- Year-ahead inflation expectations ticked up from 4.2% in July to 4.3% this month. The current reading substantially exceeds the 3.4% seen in February before the Iran conflict began, along with all 2024 readings.
- Long-run inflation expectations held steady at 3.3% for the third consecutive month, remaining a bit higher than its 2024 range of 2.8% to 3.2%.
Confidence
The Conference Board Consumer Confidence Index decreased from 90.2 in July to 89.4 (1985=100) in August. The Present Situation Index—based on consumers’ assessment of current business and labor market conditions—rose by 6.8 points to 121.2, following three months of consecutive decline. The Expectations Index—based on consumers’ short-term outlook for income, business and labor market conditions—fell by 5.8 points to 68.2.
“Consumer confidence moderated slightly in August for a second consecutive month,” says Dana M Peterson, chief economist at The Conference Board. “The Expectations Index slipped further into negative territory, which was offset by a moderate rise in the Present Situation Index after declining in the past three months. Consumer appraisals of current business conditions were mildly positive. Perceptions of the current labor market improved, reversing three months of moderate decline.”
Looking ahead, Peterson says consumers were more pessimistic about business conditions and the labor market over the next six months. Expectations for household incomes moderated but remained optimistic overall.
Data shows confidence across all age groups trended down slightly on a six-month moving average basis but remained highest among consumers under 35. Confidence was mixed as it relates to income, but generally higher-income groups were more optimistic. By generation, confidence among Gen Z remained the highest, followed closely by Millennials. The three oldest generations—Generation X, Baby Boomer and Silent Generation—trailed in confidence by a wider margin. By political affiliation, confidence among Independents and Republicans softened, while Democrats were somewhat more positive in August.
Key Takeaways, Courtesy of The Conference Board:
- Perceptions of current employment conditions improved significantly, with the labor market differential—the share of consumers saying jobs are “plentiful” minus the share saying jobs are “hard to get”—rising by 4.8 ppts to +7.5%. This increase was largely driven by more consumers reporting that jobs are “plentiful” in August, while those saying jobs are “hard to get” declined.
- Consumers’ net views of their Family’s Current Financial Situation softened a bit in August after improving last month, as the share of consumers who said their finances were “bad” rose in August. Views of their Family’s Future Financial Situation remained healthy but slightly less optimistic in August compared to June and July.
- While the share of consumers who said a U.S. recession over the next 12 months is “very likely” ticked up, consumers still perceived a low likelihood of a recession in 12 months.
- Consumers’ average and median 12-month inflation expectations were slightly more elevated in August. Most consumers—61.3%—still anticipated higher interest rates over the next 12 months, down moderately from 62% in July. Meanwhile, consumers still expected higher stock prices a year from now.
- Auto purchasing expectations remained strong. Homebuying expectations declined slightly for the month but maintained an upward trend after slumping to decade-lows in early 2024. Among consumers’ planned purchases of durable goods within six months, furniture and smartphones remained the most desired items; however, expectations for smartphones continued to moderate in August. Spending plans for televisions fell the most on a six-month moving average basis, while plans for many other durable goods moderated slightly.
- Anticipated spending on services pared back after a pop in most discretionary activities last month, as lower gas prices and the summer’s World Cup likely boosted consumers’ desire to spend in July. Despite this, consumers still planned to spend more overall on services over the next six months.
“Consumers’ write-in responses on factors affecting the economy were slightly more pessimistic in August. References to prices in general—and oil and gas specifically—remain elevated. Comments about war/conflict, food/groceries, trade, and jobs rose in August,” Peterson says.
Consumer Income & Spending
According to the U.S. Bureau of Economic Analysis (BEA), personal income, disposable income (DPI) and personal consumer expenditures (PCE) increased $54.9 billion (0.2% at a monthly rate), $48.3 billion (0.2%) and $65.2 billion (0.3%) in June.
Personal outlays—the sum of PCE, personal interest payments and personal current transfer payments—increased $70 billion in June. Personal saving was $646.1 billion, and the personal saving rate (personal saving as a percentage of DPI) registered 2.7%.
Key Takeaways, Courtesy of the U.S. Bureau of Economic Analysis:
- In June, the $65.2 billion increase in current-dollar PCE reflected increases of $58.2 billion in spending on services and $7 billion in spending on goods.
- Real PCE increased $68 billion (0.4% at a monthly rate). From the preceding month, the PCE price index decreased 0.1%. Excluding food and energy, the PCE price index increased 0.1%. From the same month one year ago, the PCE price index increased 3.7%. Excluding food and energy, the PCE price index increased 3.3% from one year ago.