WASHINGTON: US consumer confidence unexpectedly declined in August, reversing earlier gains as Americans digested rising gas and grocery costs, according to survey data published Tuesday.
The US Federal Reserve has been tackling rising prices -- with some success -- through an aggressive campaign of interest rate hikes.
However, while these hikes have brought inflation down sharply, they have also raised the cost of borrowing on everything from car loans to mortgages.
Consumer confidence declined in August to 106.1 down from a revised 114.0 in July, the Conference Board announced in a statement.
The July figure was below the median expectation of economists surveyed by MarketWatch of 116.0, and is the lowest reading since May this year.
SATYAJIT DAS COLUMN | End of Empire - 3: The US will join the UK as a failed first-world state
"August's disappointing headline number reflected dips in both the current conditions and expectations indexes," Dana Peterson, chief economist at The Conference Board, said in a statement.
She added that "consumers were once again preoccupied with rising prices in general, and for groceries and gasoline in particular."
This was most notable among wealthier consumers with household incomes of $100,000 or more, as well as those earning less than $50,000, according to the Conference Board.
"Job growth remains strong, inflation is gradually receding, and real disposable incomes are now rising, which should be positive for households," High Frequency Economics' chief US economist, Rubeela Farooqi, wrote in a note to clients Tuesday.
"However, household perceptions about labor market conditions deteriorated in August, which could be a headwind for consumers and spending," she added.