For the first time in months, Americans seemed to feel they were catching a bit of a break. Gas prices dipped in early July as tensions in the Middle East changed shape and inflation slowed. It’s not smooth traveling, though. While households felt better in early July 2026 about the country’s economic prospects, many grew less certain about their financial future amid slower hiring and concerns about job security. That pessimistic sentiment predates late July’s uptick in gas prices to above $4 a gallon (again). For the 11 survey questions about personal finances, the economy and the labor market that inform the PYMNTS Consumer Expectations Index (PCEI), answers to the one about personal job security formed the only measure that worsened compared to the prior month.
This latest edition of the PCEI found that overall confidence rose to 55.6 in July 2026, driven by a monthly 4.1-point jump in household perceptions of the U.S. macroeconomic and buying climate. (The PCEI captures whether households not only feel optimistic but also whether they think they have the financial capacity and job security to translate that sentiment into spending. A score of 50 on the 1-100 scale represents a neutral sentiment; higher scores indicate confidence.) Yet certainty of keeping one’s job over the next year dipped 5.0 points compared to June 2026, revealing a disconnect between consumers’ stronger optimism about the economy and their declining confidence in the job security that fuels personal financial stability.
These are just some of the findings from the July 2026 edition of the PCEI, which draws from a survey of 2,396 U.S. adult consumers in the first half of July. With roughly two-thirds of Americans living paycheck to paycheck, consumers’ spending decisions may depend on which feeling proves more powerful. If relief from slowing inflation outweighs anxiety about employment, spending could gain momentum. If job worries continue to spread, consumers may remain cautious despite signs that the broader economy is improving (a trend fueled by heavy investment in artificial intelligence, chips and data centers that helped drive GDP up an annualized 2.1% in the first quarter of 2026 from 0.5% in the prior quarter).
The first half of July’s increase in consumer confidence mostly came from lower prices at the gas pump.
The PCEI consists of three subindices—Macroeconomic and Buying Climate, Labor Market Security, and Personal Financial Resilience—that are combined into a single index. The gauge climbed to 55.6 in July, a gain of 2.0 points on June 2026 and its third-highest reading across all 10 months of the survey. Nearly all the improvement came from the Macroeconomic and Buying Climate measure, which jumped 4.1 points, its largest single-month rise since the survey began.
That came as gasoline prices fell 9.7% in June, tensions in the Middle East appeared to ease briefly and the Bureau of Labor Statistics’ U.S. Consumer Price Index (CPI) dropped 0.4% for the month, pushing the annual rate down to 3.5%. It was the largest one-month decline since April 2020.
That change was felt most acutely by the roughly 70 million Americans, or around 24% of the adult population, struggling to pay their monthly bills. These consumers recorded a 4.7-point increase in their Macroeconomic and Buying Climate scores, a larger jump compared to consumers living paycheck to paycheck comfortably (around 118 million Americans, or 43% of the adult population) or not financially challenged at all (93 million individuals, one-third of the population).
In general, Americans appear to have translated their temporary relief at the gas pump into a rosier read on the overall economy.
Still, even after its record jump, the Macroeconomic and Buying Climate subindex sits at 48.6, below the neutral midpoint of 50. Gasoline remains 28% more expensive than 12 months ago, and the 3.5% annual inflation rate is above the Federal Reserve’s target of 2%. Consumers appear to be comparing July 2026 to the prior month rather than to a more affordable baseline in the more distant past.
Meanwhile, necessities are still getting more expensive. The share of consumers who say essential expenses rose “a lot” over the past 12 months has held near 35% for four straight months. Prices haven’t come back down but have climbed at a gentler pace, so the share of consumers who feel the strain of the cost of essentials is holding steady.
Even as overall sentiment improved, job confidence dropped.
Of the 11 questions that inform the PCEI, 10 held steady or improved in July.[1] The only one that worsened was confidence in keeping one’s job over the next year. That measure dropped 5.0 points, to 79.0.
Not all measures of employment confidence fell. The survey asked respondents about job security in three ways—likelihood of being terminated in the next 12 months, size of layoffs at their employer and ability to find a new job at the salary they require—and only the personal, forward-looking one (the first option) worsened.
Meanwhile, consumers’ read on today’s job market actually improved, rising 2.5 points to 49.2, although it remains below neutral. Their expectation of layoffs around them over the coming year barely moved, holding nearly flat at 70.9. Only the question of whether they personally will still have their job a year from now showed a decline.
Government data supports consumers’ pessimistic read on their immediate personal job security without explaining their longer-term pessimism. The layoff rate held at 1.1% in May, low and steady, according to the Bureau of Labor Statistics’ Job Openings and Labor Turnover Survey. Workers quit jobs at a 1.9% monthly rate, near the lowest level since 2020, the kind of hesitation that shows up when workers aren’t confident a better offer is waiting. Job openings reached a two-year high of 7.6 million in May. Yet none of that data can explain a drop in confidence about the future because it only measures what has already happened.
Job concerns are felt most acutely by households with the least financial security
Confidence in keeping one’s job fell 6.1 points among consumers living paycheck to paycheck comfortably, and 9.5 points—the steepest drop of any segment—among those living paycheck to paycheck with difficulty paying their bills. Consumers who don’t live paycheck to paycheck saw their overall labor confidence rise, with their personal job security reading nearly flat.
There were significant generational differences as well. Generation Z’s personal job security score fell 13.7 points in a single month.[2] Recent college graduates between the ages of 22 and 27 faced a 5.6% unemployment rate in March 2026, the latest read, well above the 4.2% national rate, and entry-level hiring has pulled back as employers pause junior roles, according to research from the Federal Reserve Bank of New York.
Consumers’ outlook on the country’s economic future is rising faster than optimism about their personal finances.
Americans’ three-year outlook for the national economy increased by 4.1 points in July 2026, the largest single-month jump the survey has recorded. In contrast, their outlook for their household finances over that same three-year horizon moved up by just 0.8 points.
In general, consumers appear to expect their personal future to outshine the country’s. That gap has run between 8.4 and 11.8 points across every month of the survey. July 2026’s increase in national optimism narrowed the gap to 8.4 points from 11.7 the month before, the smallest gap the index has recorded.
At the same time, some demographics are even feeling worse about their finances. Two groups—consumers living paycheck to paycheck comfortably and Gen Z—saw declines in their personal three-year outlook even as their view of the national economy improved.
The gap between mood and financial means also shows up in the numbers that measure capacity to spend. The national personal saving rate stood at 3.0% in May 2026, among its lowest readings since 2022 and well below January 2026’s 4.3%. The lower rate may not be enough to amass an adequate financial safety net.
Spending behavior tends to flow from how people feel about their own finances more than from how they feel about the economy in the abstract. By that measure, August 2026’s PCEI reading will test how early July’s improved national mood informs how consumers feel about their paychecks and their financial futures.
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Methodology
The PYMNTS Consumer Expectations Index (PCEI) is a monthly, survey-based index that translates consumer expectations into a business-usable signal by separating how consumers feel from whether they have the capacity to act. Scores run from 0 to 100, with 50 as the neutral midpoint and higher scores reflecting more positive sentiment.
Each monthly wave surveys approximately 2,000 or more U.S. adults, weighted to national benchmarks across key demographics. The July 2026 wave, on which this report is based, surveyed 2,396 consumers. The series began in October 2025.
Each of the index’s 11 core questions is scored on a 0-to-100 scale, where the most positive possible response equals 100, the neutral midpoint equals 50 and the most negative response equals 0. Negatively framed questions are reverse-coded. The overall index is built from a fixed roll-up of the subindex scores; the exact weighting is proprietary to PYMNTS Intelligence.
[1] The 11 questions address a respondent’s current financial situation, future financial situation, debt manageability, savings capacity, financial emergency readiness, short-term business conditions, long-term business conditions, buying conditions, personal job security/income-loss risk, perceived layoff risk and job mobility/income replaceability.
[2] This reading is directional given the segment’s smaller sample size. PYMNTS Intelligence uses the following birth dates and age ranges in 2026 for generational cohorts: baby boomers: born in 1964 or earlier and now aged 62 or older; Generation X: born between 1965 and 1980 and now aged 46-61; millennials: born between 1981 and 1996 and now aged 30-45; bridge millennials, a micro-cohort born roughly between 1977 and 1980 and now aged 46-49; Generation Z: born between 1997 and 2009 and now aged 29 or younger; Gen Alpha, born in 2010 or later.
