U.S. consumer confidence dips as gas prices rise amid Iran conflict

WASHINGTON (AP) — U.S. consumer confidence fell in July as gas prices increased amid escalating tensions between the United States and Iran, according to the Conference Board.

The organization said Tuesday that its consumer confidence index dropped to 90.8 in July from 92.2 in June. The index has remained in a tepid range since the start of the year, after reaching above 100 in late 2024 and early 2025.

Consumer attitudes improved slightly in June as gas prices eased to about $3.70 a gallon from over $4.50 in late April and early May. However, as fighting in the Middle East intensified, gas prices resumed their climb, reaching $4.10 per gallon Tuesday, according to AAA.

The recent escalation began after Iran attacked U.S. and Israeli interests in late February, resulting in Iran shutting down the Strait of Hormuz, a vital shipping lane through which about 20% of the world’s oil passes. This move caused a spike in gas prices, accelerating inflation and reducing Americans’ inflation-adjusted incomes.

Americans continue to express pessimism about the economy, reflecting five years of high inflation. The survey, conducted from July 1 to July 22, also showed increased concern over food prices, which have risen 33% since 2019, with grocery costs soaring and consumers resorting to couponing and comparison shopping. The price of ground beef hit $6.82 per pound in June, a 79% increase from 2019, according to the Bureau of Labor Statistics.

Job market perceptions also shifted slightly downward. Employers added only 57,000 jobs last month, less than half of the previous month’s total, and the unemployment rate fell slightly to 4.2% from 4.3%. However, the decline was partly due to discouraged workers leaving the labor force.

While mentions of war and geopolitics in survey responses decreased, the Conference Board expects such references may rise if recent fighting between Iran and the U.S. continues to escalate.

Source: Original Article