Rising unemployment concerns weigh on consumer confidence in US and Germany

Consumer confidence in the United States and Germany declined in August as fears about job security and economic uncertainty intensified.

In the U.S., concerns about President Trump’s tariff policies and inflation weighed on sentiment, while in Germany, rising unemployment fears led to a third consecutive monthly decline in consumer confidence.

The U.S. Conference Board reported a minor drop in its consumer confidence index to 97.4 in August from 98.7 in July, marking the first decline in four months.

Americans’ perception of job availability worsened, with 20% saying jobs are difficult to obtain, their highest level since 2021, even as the official unemployment rate remained at 4.2%.

What factors contributed to the decline in consumer confidence?

Economic uncertainty, trade tensions, and inflation expectations all contributed to the current economic situation.

Consumer inflation expectations in the U.S. rose to 6.2% in August from 5.7% in July, influenced by tariffs on over 60 countries starting earlier in the month.

Germany’s consumer climate indicator dropped to -23.6 for September, the lowest since April, amid a slump in income outlooks and economic expectations.

Did you know?
20% of American consumers say jobs are hard to get, the highest since 2021.

How are job fears affecting consumer behavior?

Both countries report growing anxieties about job availability. Germany faces a potential unemployment surge beyond three million in August, fueling consumer pessimism.

In the U.S., sluggish job growth and substantial job cuts (over 800,000 announced in 2025) have dampened household willingness to spend.

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What role do tariffs and inflation play in sentiment?

Tariff-driven price pressures are increasing consumer inflation concerns in the U.S., reversing months of easing fears.

Germany’s stagnant wages combined with rising inflation amplify economic worries, influencing reduced spending intentions and a rise in saving behavior.

What are the broader economic implications?

Falling consumer confidence and job insecurities may slow economic growth in both countries. Despite these concerns, European stock markets have remained relatively stable, with Germany's DAX index near record highs.

The persistent economic uncertainties underscore the fragility of the global recovery and the need for cautious optimism moving forward.