US consumer confidence falls as paychecks lag living costs
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US consumer confidence fell in August to its lowest level since the start of the year, the Conference Board reported. Nearly three-quarters of consumers expect price increases to outrun income gains over the coming year. The decline comes even as inflation has cooled from earlier this year.
Key Facts
- US consumer confidence fell in August to the lowest level since the start of the year, according to the Conference Board.
- Nearly three-quarters of consumers expect price increases to outrun their income gains over the coming year, according to Conference Board data.
- Consumer prices rose 3.7% in July from a year earlier, according to the Personal Consumption Expenditure price index.
- More than 4 in 10 workers who stayed with the same employer from 2021 through 2024 ended up with lower real wages, according to ADP research.
- Even including job changers, 37% of workers were still worse off in real terms by the end of 2024, ADP found.
Consumer Sentiment
The Conference Board's consumer confidence index fell in August to its lowest level since the start of the year. Nearly three-quarters of consumers expect price increases to outrun their income gains over the coming year, according to new data from the Conference Board. Yelena Shulyatyeva, the Conference Board's senior US economist, said consumer confidence is closely tied to whether households feel their paychecks are keeping pace with the cost of living. Shulyatyeva added that while people care about the direction of inflation, what matters more in their daily lives is purchasing power.
Wage and Price Divergence
Consumer prices rose 3.7% in July from a year earlier, according to the Personal Consumption Expenditure price index. Personal incomes after taxes rose more quickly than prices last month, but consumer spending did not follow suit. Moody's economist Mark Zandi said consumers feel crummy because they know they cannot keep up and their purchasing power is eroding. ADP researchers examined payroll records of 16 million private-sector workers in the United States between 2016 and 2025. The ADP study found that more than 4 in 10 workers who stayed with the same employer from 2021 through 2024 ended up with lower real wages. Even including people who changed jobs and landed larger pay increases, 37% of workers were still worse off in real terms by the end of 2024.
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US consumer confidence falls as paychecks lag living costs
