Americans' confidence in the economy slipped in July as gas prices climbed back above $4 per gallon, reflecting how escalating U.S.-Iran hostilities continue to squeeze household budgets. The Conference Board reported Tuesday that its consumer confidence index fell to 90.8 in July from 92.2 in June, marking months of stagnant sentiment as working families absorb the economic fallout from Middle East conflict.
The index has hovered in essentially the same tepid range since the beginning of the year. In late 2024 and early 2025, readings were well above 100.
Gas Prices Hit Wallets Again
Consumer attitudes had improved modestly in June as gas prices came down to around $3.70 a gallon from more than $4.50 a gallon in late April and early May. But as fighting in the Middle East escalated, the average price for a gallon of gas in the U.S. started to rise again. On Tuesday it was $4.10, according to AAA.
After being attacked by the U.S. and Israel in late February, Iran shut down the Strait of Hormuz, through which about one-fifth of the world's oil travels, causing a spike in gas prices. That accelerated inflation and caused Americans' inflation-adjusted incomes to decline. The conflict that began Feb. 28 has had direct consequences for American families far removed from the battlefields, as energy costs ripple through every corner of the economy.
Inflation Climbs Under Trump
Americans remained soured on the economy after five years of elevated inflation, posing a risk to President Donald Trump and Republicans in the midterm elections, which were now less than 100 days away. Trump continued to blame inflation on his predecessor, Democrat Joe Biden. Inflation had risen since Trump's inauguration last year, to 3.5% from 3% in January 2025. It jumped even further after the Iran war began Feb. 28, when it was just 2.4%.
Write-in responses to the survey, collected from July 1 to July 22, remained pessimistic. The Board said references to gas prices were down slightly but remained elevated. Respondents' mentions of food and grocery prices increased, reflecting the persistent strain on household budgets.
Grocery Bills Squeeze Families
Government data showed that buying food to bring home had gotten 33% more expensive since the beginning of 2019. To navigate those higher prices, Americans turned to couponing, comparison shopping and cutting back on favorite foods as they absorbed the biggest jump in grocery prices in a half-century. These aren't just statistics. They're families making hard choices about what to put on the table.
Beef epitomized out-of-control grocery prices for many Americans. The price of a pound of ground beef reached $6.82 in June, 79% more than at the beginning of 2019, according to Bureau of Labor Statistics data. What was once a staple protein for middle-class families has become increasingly out of reach.
Job Market Shows Cracks
References to jobs and unemployment picked up slightly this month and views of the current job market fell. Expectations of how the labor market would be six months going forward improved slightly, but remained in negative territory. U.S. employers slowed hiring last month and added only 57,000 jobs, less than half the previous month's total.
The unemployment rate declined to a low 4.2% from 4.3% in May, though the drop mostly occurred because many people out of work gave up looking and were no longer counted as unemployed. That's a troubling sign that discouraged workers are leaving the labor force rather than finding opportunities.
The number of consumers who mentioned war and geopolitics decreased this month, but the Board said recent escalation in fighting between Iran and the U.S. could cause those mentions to rise in the next survey.
Why This Matters:
The sustained erosion of consumer confidence reveals how foreign policy decisions carry direct costs for American families. When conflict disrupts global oil markets, it's working people who pay the price at the pump and the grocery store. Five years of elevated inflation have depleted savings and strained household budgets, while real incomes decline. The weakening job market adds another layer of economic insecurity, particularly as discouraged workers exit the labor force entirely. With midterm elections less than 100 days away, voters will judge whether current leadership has adequately protected their economic security. The data suggests families are struggling with basic necessities, from ground beef to gasoline, while geopolitical tensions continue to drive up costs beyond their control.