U.S. Consumer Confidence Plummets to Decade Low Amid Economic Worries
The Conference Board reported on Tuesday that U.S. consumer confidence experienced a dramatic decline in January, falling to its lowest level since May 2014. The organization's closely watched consumer confidence index dropped by 9.7 points to 84.5, a reading that even falls below the lowest measurements recorded during the COVID-19 pandemic.
Sharp Decline in Both Present and Future Assessments
All five components of the index deteriorated significantly, with consumers' assessments of their current economic situation sliding by 9.9 points to 113.7. More concerning is the measure of Americans' short-term expectations for income, business conditions, and the job market, which tumbled 9.5 points to 65.1. This reading has now remained below 80 for twelve consecutive months, a threshold that economists often view as a potential signal of an approaching recession.
"Confidence collapsed in January, as consumer concerns about both the present situation and expectations for the future deepened," stated Dana Peterson, the Conference Board's chief economist. "The overall index reached its lowest level since May 2014, surpassing even its COVID-19 pandemic depths."
Multiple Economic Concerns Weigh on Consumers
Survey respondents expressed heightened concerns about several economic factors:
- References to inflation, including gas and grocery prices, remained elevated
- Mentions of tariffs and trade policies increased significantly
- Concerns about politics and the labor market rose noticeably
- Comments about health insurance and international conflicts also became more frequent
Job Market Perceptions Worsen
The Conference Board's survey revealed deteriorating perceptions of the labor market. Only 23.9% of consumers said jobs were "plentiful," down from 27.5% in December. Meanwhile, 20.8% of consumers reported that jobs were "hard to get," up from 19.1% the previous month.
Economists note that the country's labor market has been stuck in what they describe as a "low hire, low fire" state. Businesses appear to be standing pat due to uncertainty surrounding trade policies and the lingering effects of elevated interest rates.
Employment Growth Shows Significant Slowdown
The government reported earlier this month that employers added just 50,000 jobs in December, nearly unchanged from 56,000 in November. The unemployment rate currently stands at 4.4%. Job gains have been subdued throughout the year, particularly following trade policy announcements in April.
The economy gained just 584,000 jobs in 2025, sharply lower than the more than 2 million added in 2024. This softening in the job market is occurring even as the U.S. economy continues to grow, often exceeding projections. Powered by strong consumer spending, the U.S. economy grew at the fastest pace in two years from July through September, according to the government's latest estimate.
The significant gap between economic growth indicators and consumer confidence suggests that Americans are becoming increasingly concerned about their financial futures despite positive macroeconomic data. This disconnect between economic performance and public perception represents a notable challenge for policymakers and economic forecasters as they navigate uncertain economic conditions.
