In July, Americans’ confidence in the economic landscape has decreased. This downturn coincides with a rise in gas prices, a result of heightened tensions between the U.S. and Iran. Data from the Conference Board indicates that the consumer confidence index dipped to 90.8 from 92.2 in June. This range has been relatively stable since the beginning of the year, contrasting with figures exceeding 100 in late 2024 and early 2025.
Consumer sentiment showed a slight improvement in June when gas prices temporarily dropped to around $3.70 per gallon from highs above $4.50 in April and May. However, the ongoing conflict in the Middle East has pushed gas prices upward again, with Tuesday’s average reaching $4.10, as reported by the auto club AAA.
The economic tensions heightened following an attack on Iran by the U.S. and Israel. Iran countered by closing the Strait of Hormuz, a vital passage for about 20% of global oil transport. This closure led to a spike in gas prices, further driving inflation and impacting inflation-adjusted incomes in the U.S.
Public dissatisfaction with the economy persists, partly due to five years of heightened inflation levels. Such dissatisfaction could pose challenges for President Donald Trump and the Republican party with midterm elections approaching in under 100 days. President Trump has attributed the inflation surge to his predecessor, Joe Biden, despite inflation rates increasing since Trump’s inauguration, moving to 3.5% from 3% in January 2025. The onset of the Iran conflict on February 28 led to a further jump from 2.4%.
The Conference Board’s survey responses collected between July 1 and July 22 portray continued pessimism. Mentions of gas prices, though slightly lessened, and discussions on food and grocery costs rose. Official reports indicate an increase of 33% in grocery prices since 2019. Consequently, many Americans are turning to methods like couponing, price comparison, and food reductions to manage the steep hike in grocery costs. A notable example is the price of ground beef, which hit $6.82 per pound in June—an increase of 79% since early 2019, based on Bureau of Labor Statistics data.
Mention of employment conditions increased slightly, while perceptions about the current job market weakened. Future expectations for the labor market improved marginally but remain negative. U.S. employers added 57,000 jobs last month, a significant decrease from the previous month. The unemployment rate dropped slightly to 4.2% from 4.3% in May, primarily because some individuals ceased job hunting and were thus excluded from unemployment figures.
The frequency of war and geopolitical references declined this month. However, the Conference Board anticipates these may rise again if Iran-U.S. hostilities escalate further.