Confidence collapsed to lowest point since 2014, surpassing pandemic depths – The Conference Board Consumer Confidence Index fell by 9.7 points in January to 84.5 (1985=100), from an upwardly revised 94.2 in December. A 5.1-point upward revision to December’s reading of the Index resulted in a slight increase last month, reversing the initially reported decline. However, January’s preliminary results showed confidence resumed declining after a one-month uptick. The Present Situation Index based on consumers’ assessment of current business and labor market conditions dropped by 9.9 points to 113.7 in January. The Expectations Index based on consumers’ short-term outlook for income, business, and labor market conditions fell by 9.5 points to 65.1, well below the threshold of 80 that usually signals a recession ahead. The cutoff for preliminary results was January 16, 2026. “Confidence collapsed in January, as consumer concerns about both the present situation and expectations for the future deepened,” said Dana M Peterson, Chief Economist, The Conference Board. “All five components of the Index deteriorated, driving the overall Index to its lowest level since May 2014 (82.2) surpassing its COVID-19 pandemic depths.” The Present Situation Index fell, as net views on current business conditions dwindled to just barely positive, at +0.1%. Perceptions of employment conditions also edged lower, with the labor market differential the share of consumers saying jobs are “plentiful” minus the share saying jobs are “hard to get” continuing to flag. All three Expectations Index components also weakened in January. Expectations for business and labor market conditions six months from now fell further into negative territory. The outlook for household incomes became less positive. Among demographic groups, confidence on a six-month moving average basis dipped for all age groups in January, although consumers under 35 continued to be more confident than consumers age 35 and older. Confidence among all generations trended downward in the month, but Gen Z remained the most optimistic of all generations surveyed. By income, confidence on a six-month moving average basis ticked downward for all brackets, and consumers earning less than $15K remained the least optimistic among all income groups. Consumer confidence continued to fade in January among all political affiliations, with the sharpest decline among Independents. Peterson added: “Consumers’ write-in responses on factors affecting the economy continued to skew towards pessimism. References to prices and inflation, oil and gas prices, and food and grocery prices remained elevated. Mentions of tariffs and trade, politics, and the labor market also rose in January, and references to health/insurance and war edged higher.” Several weeks after the Federal Reserve cut monetary policy rates in December, the share of consumers expecting interest rates 12 months from now to be on net higher dipped in January. Consumers’ average 12-month inflation expectations bounced up, but the median fell further. The balance of consumers’ expectations for stock prices twelve months from now—higher minus lower—retreated after a pop. On net, consumers’ views of their Family’s Current Financial Situation improved slightly in January, after a plunge into negative territory in December was revised upward to reveal a small net positive. However, expectations for their Family’s Future Financial Situation were again less positive in January after an improvement in December. Meanwhile, the share of consumers believing a US recession over the next 12 months is “somewhat likely”—edged downward, as did the share who said “not likely.” The share who said recession is “very likely” ticked back up and the small percentage who said the US is “already in one” crept higher.
Conference Board – Consumer Confidence Index (01-27-26)
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