A new report on consumer sentiment is set to be released on Friday, providing insights into how shoppers have reacted to recent economic events. This month has seen significant developments, including the firing of a top labor statistics official by President Donald Trump, which occurred just hours after the release of disappointing jobs data.

The report will focus on consumer attitudes in August and comes shortly after an inflation reading that was lower than economists had anticipated. This decline in inflation may offer some relief to consumers concerned about potential price increases due to new tariffs. The report's timeframe also aligns with the implementation of sweeping tariffs that have broadened the scope of Trump's aggressive trade policies.

Economists predict a slight improvement in consumer sentiment for August, which would continue a trend of increasing optimism over the past two months. Prior to this positive shift, consumer sentiment had dropped to near its lowest point since a period of inflation three years ago. Even with the expected rise, consumer sentiment will still be below levels recorded in December, before Trump took office.

Consumer spending, which constitutes about two-thirds of U.S. economic activity, is a crucial indicator of the nation's economic health. Recent data suggests the possibility of an economic slowdown. A report on gross domestic product released last month indicated an average annualized growth rate of 1.2% for the first half of 2025, significantly lower than the 2.8% growth seen the previous year.

Additionally, a jobs report from the U.S. Bureau of Labor Statistics on August 1 highlighted a notable slowdown in the labor market. Shortly after this report, Trump dismissed BLS Commissioner Erika McEntarfer, alleging without evidence that she had produced "faked" statistics. McEntarfer, who was appointed by President Biden and confirmed by the Senate in 2024, had a two-decade career in federal service. In a social media post following her dismissal, she stated, "It has been the honor of my life to serve as Commissioner of BLS alongside the many dedicated civil servants tasked with measuring a vast and dynamic economy. It is vital and important work and I thank them for their service to this nation."

William Beach, a former BLS commissioner appointed by Trump, criticized McEntarfer's firing, calling it "totally groundless" and a dangerous precedent that undermines the Bureau's statistical mission.

Despite these challenges, some areas of the economy have shown resilience. The U.S. has largely avoided the widespread job losses typically associated with recessions. Consumer spending increased over the three months ending in June, and corporate earnings have remained strong. The Federal Reserve decided to maintain interest rates during its July meeting, expressing concerns about a potential resurgence of inflation as a result of the new tariffs. At a press conference last month, Fed Chair Jerome Powell noted that tariffs could "push up prices and weigh on economic activity" throughout the year, but emphasized that the impact would depend on the "ultimate level" of the tariffs, which have been subject to frequent changes.