The index of consumer confidence dipped to 106.1 in August from a revised 114 in the prior month, according to a report by the Conference Board.
Economists had predicted a slight decrease to 116, but the initial reading came in at 117, the highest level in two years.
The revised July reading was the highest since December 2021.
The survey’s assessment of consumers’ feelings about current economic conditions fell to 114.8 in August from 153 in July.
Expectations for the next six months also declined, dropping from 88 to 80.2. Although just above the historically significant 80 level, this reading still suggests the possibility of a recession within the next year.
Confidence had been bolstered in June and July by a tight labor market, but these gains were reversed in August.
Economists believe that higher gasoline prices played a role in the decline. The price of unleaded gasoline has increased by 19.6% since the beginning of the year and over 2% from last month.
Insight from the Conference Board
The Conference Board noted that it still expects a recession before the end of the year.
Dana Peterson, the organization’s chief economist, said that consumer responses indicated rising concerns about overall prices, particularly for groceries and gasoline.
On Tuesday, stock markets (DJIA and SPX) were trading higher. The yield on the 10-year Treasury note (BX:TMUBMUSD10Y) fell to 4.16%.