US and Brazilian Consumer Confidence Drop in August

Consumer confidence declined in both the United States and Brazil during August, driven by inflation, high borrowing costs, and geopolitical instability. In the US, The Conference Board reported that its confidence index fell to 89.4, the lowest level since January. While current views of the labor market improved slightly, expectations for the next six months soured due to cost-of-living pressures and gasoline prices exceeding $4 per gallon. These fuel costs were exacerbated by renewed hostilities in the US-Iran conflict and a US government announcement to increase economic pressure on Tehran.

American economic indicators showed further strain as new home sales fell 10.5% month-over-month in August to a seasonally adjusted annual rate of 607,000. This slump follows a period of elevated finance costs, though median new home prices hit a five-year low. Additionally, the US job market stalled in July with 23,000 job cuts and significant downward revisions to previous payroll data.

In Brazil, the Getulio Vargas Foundation reported that consumer confidence fell to 84.7, the lowest level since November 2022. This marks the fourth consecutive monthly decline. The drop was driven by pessimism regarding the purchase of durable goods and the future financial situation of families, which analysts attribute to high interest rates and significant consumer debt.