Americans' confidence in the economy plummeted in July as the cost of gas surged again, a direct consequence of escalating U.S. and Iranian military conflict. The Conference Board reported Tuesday that its consumer confidence index fell to 90.8 in July from 92.2 in June. This figure remains within the tepid range observed since the beginning of the year, a stark contrast to readings well above 100 in late 2024 and early 2025.
Consumer attitudes had shown a modest improvement in June when gas prices dipped to approximately $3.70 a gallon, down from over $4.50 a gallon in late April and early May. However, as fighting intensified in the Middle East, the average price for a gallon of gas in the U.S. climbed once more, reaching $4.10 on Tuesday, according to AAA.
Imperial Conflict and Worker Exploitation
Following attacks by the U.S. and Israel in late February, Iran shut down the Strait of Hormuz, a critical chokepoint through which about one-fifth of the world’s oil travels. This action triggered a sharp spike in gas prices, accelerating inflation and causing a decline in Americans' inflation-adjusted incomes. Workers have remained pessimistic about the economy after five years of elevated inflation, a systemic dynamic that poses a risk to President Donald Trump and Republicans in the midterm elections, now less than 100 days away.
President Trump continued to deflect blame for inflation onto his predecessor, Democrat Joe Biden. Inflation has risen since the first year of Trump's term, climbing to 3.5% from 3% in January 2025. It jumped further after the Iran war began on Feb. 28, when it stood at 2.4%.
Write-in responses to the consumer survey, collected from July 1 to July 22, remained overwhelmingly pessimistic. The Board noted that while references to gas prices were slightly down, they stayed elevated, and mentions of food and grocery prices increased significantly. Government data reveals that buying food to bring home has become 33% more expensive since the beginning of 2019, a clear example of surplus extraction from working-class households.
Beef has become a symbol of these higher costs for many Americans struggling with wage suppression. The price of a pound of ground beef reached $6.82 in June, an astounding 79% more than at the beginning of 2019, according to Bureau of Labor Statistics data. This represents the biggest jump in grocery prices in a half-century, forcing Americans to resort to couponing, comparison shopping, and cutting back on essential foods.
Capital's Gains, Labor's Losses
References to jobs and unemployment picked up slightly in July, and views of the current job market deteriorated. Expectations for the labor market six months ahead improved marginally, yet they remained in negative territory. U.S. employers slowed hiring last month, adding only 57,000 jobs, less than half the previous month’s total. The unemployment rate declined to 4.2% from 4.3% in May, but this drop largely occurred because many people out of work gave up looking for employment and were subsequently no longer counted as unemployed, masking the true extent of joblessness.
The number of consumers who mentioned war and geopolitics decreased in July. However, the Board warned that the recent escalation in fighting between Iran and the U.S. could cause those mentions to rise in the next survey, highlighting the direct link between imperial adventurism and domestic economic hardship. The U.S. goods trade deficit contracted less than expected in June and continued to act as a drag on second-quarter GDP growth, even as automotive vehicle exports rose 5.1% and exports of consumer goods rose 3.2%. The government is scheduled to publish the advance estimate of second-quarter GDP growth two days after July 28, 2026.