U.S. consumer sentiment dropped 2.9 points this week to 88.2, driven largely by a steep decline in confidence among higher-income households.
According to survey data, confidence among top earners fell 9.3 points to 107.3, wiping out a 6.6-point increase recorded the previous week. The retreat was evident across all survey metrics, with lower assessments of current personal finances and weaker expectations for long-term business conditions.
The downturn followed Federal Reserve Chair Kevin Warsh’s hawkish remarks at the annual Jackson Hole economic symposium. Those comments raised the likelihood of a September interest rate increase to roughly 50% and triggered volatility in the stock market. Because higher-income households hold more exposure to equity markets and business cycles, the resulting market decline and potential economic slowdown hit this demographic hardest.
Other economic indicators showed only minor movement. Pay loss eased slightly to 11.3%, while consumer inflation expectations edged up to 4.4%. Recent macroeconomic reports also showed second-quarter gross domestic product growth held at 1.5%, while the personal saving rate rose to 3.0%, a figure that remains low by historical benchmarks.
The shift in consumer attitudes comes ahead of the Bureau of Labor Statistics’ August employment report, scheduled for release on Friday. The jobs report will serve as a key data point for Federal Reserve policymakers ahead of their September rate decision.
Private tracking by Morning Consult showed its unemployment index remained mostly flat between the July and August survey reference weeks, before edging slightly higher late in the month.
The tracking data also revealed a widening gender gap in labor market conditions. From late 2024 through the spring, men experienced steadier employment trends than women on a year-over-year basis. However, that trend reversed over the last three months, with men’s unemployment index running higher than women’s since June.
The divergence mirrors industry-level hiring trends. Sectors such as manufacturing have plateaued since the spring, and technology firms have cut payrolls over the past year. In contrast, health services and education, which employ a larger proportion of female workers, have maintained steady job growth.
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