Americans' confidence in US economy falls as Iran conflict sends gas
prices higher
[July 29, 2026] By
MATT OTT
WASHINGTON (AP) — Americans’ confidence in the economy fell this month
as gas prices resumed their climb after the U.S. and Iran stepped up
their fighting.
The Conference Board said Tuesday that its consumer confidence index
fell to 90.8 in July from 92.2 in June. That's essentially the same
tepid range its been in since the beginning of the year. In late 2024
and early 2025 the readings were well above 100.
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 the auto club 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,
causing Americans’ inflation-adjusted incomes to decline.
Americans remain soured on the economy after five years of elevated
inflation, potentially posing a risk to President Donald Trump and
Republicans in the midterm elections, which are now less than 100 days
away.
Trump continues to blame inflation on his predecessor, Democrat Joe
Biden. Yet inflation has 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, which were collected from July 1 to
July 22, remained pessimistic. The Board said references to gas prices
were down slightly but remained elevated. Respondents' mention of food
and grocery prices increased.
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Ada Torres holds tomatoes while shopping for produce, Thursday, July
2, 2026, in Cleveland, Texas, about 45 miles northeast of Houston.
(Sandy Guatibonza/La Esquina TX via AP)
 Government data shows that buying
food to bring home has gotten 33% more expensive since the beginning
of 2019. To navigate those higher prices, Americans have turned to
couponing, comparison shopping and cutting back on favorite foods as
they absorb the biggest jump in grocery prices in a half-century.
Beef epitomizes 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.
References to jobs and unemployment picked up slightly this month
and views of the current job market fell. Expectations of how the
labor market will 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.
The number of consumers who mentioned war and geopolitics decreased
this month, but the Board suspects that recent escalation in
fighting between Iran and the U.S. could cause those mentions to
rise in the next survey.
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