The consumer mood in the United States has suddenly shifted from one of optimism to pessimism. Now, it is near its all-time low level since 2020’s dramatic upward inflation surprise. Economists are looking for a modest increase in consumer sentiment for the month of August. That is an indication that shopper sentiment is starting to turn following a wave of economic events.
The long-awaited consumer sentiment report would come out just a few days after inflation came in lower than expected. This report will provide insights into how consumers have reacted to recent economic events, including a cooling labor market and changes within the U.S. Bureau of Labor Statistics (BLS).
Consumer spending, which constitutes nearly two-thirds of U.S. economic activity, increased a tepid 0.4%. That’s a dramatic jump over the three-month period ending in June. This increase comes even as general consumer confidence remains below where it was in December 2016. That was in early January 2017, just before Donald Trump was sworn into office. So far, the U.S. economy has mostly managed to avoid the staggering employment declines typically associated with recessions. The latest BLS report, released on August 1, confirms this advice, showing a dramatic labor market slowdown while highlighting this very trend.
By the first half of 2025, the average annualized growth rate peaked at 1.2%. This figure is very much lower than last year’s outstanding growth of 2.8%. Federal Reserve Chairman Jerome Powell noted that tariffs could “push up prices and weigh on economic activity” throughout the year. These economic challenges are very salient realities shaping the consumer mindset as they contend with inflation and recessionary choices where to spend discretionary dollars.
Economists expect Friday’s consumer sentiment reading to provide some good news. This very encouraging development is a welcome reversal of the past two-month trend. Our report will dissect shopper attitudes with inflation, rising interest rates and other economic headwinds, giving you a better understanding of today’s consumer.
“It has been the honor of my life to serve as Commissioner of BLS alongside the many dedicated civil servants tasked with measuring a vast and dynamic economy. It is vital and important work and I thank them for their service to this nation.” – Erika McEntarfer
The context surrounding the BLS has changed recently, following President Trump’s dismissal of Dr. Erika McEntarfer as Commissioner of Labor Statistics just hours after the release of disappointing jobs data. As one of our economic betters put it, this move threatens the independence of the entire Bureau and endangers their fledgling statistical mission.
“The totally groundless firing of Dr. Erika McEntarfer, my successor as Commissioner of Labor Statistics at BLS, sets a dangerous precedent and undermines the statistical mission of the Bureau.” – William Beach
