U.S. consumer confidence sinks to lowest level since 2014 as inflation and job worries rise
The Conference Board reported a sharp drop in consumer confidence, driven by heightened concerns about prices, tariffs, and a labor market that feels less secure to households.
Confidence takes a steep hit
U.S. consumer confidence dropped sharply in January, sliding to its lowest level since 2014 as Americans reported deeper anxiety about inflation, economic policy and job prospects. The Conference Board said its overall index fell 9.7 points to 84.5. A closely watched expectations gauge also declined, remaining well below a level that can signal recession risk, as households expressed growing pessimism about income and the job market.
The decline appeared broad-based, reflecting worries that the cost of living remains too high even as the economy continues to grow. Survey responses cited persistent concern about gas and grocery prices, and there was increased mention of tariffs and trade, politics, health insurance, and war. The readout points to a mismatch between headline growth data and what many households feel day-to-day, especially when prices stay elevated and hiring slows.
Labor market perceptions deteriorate
Job-market perceptions weakened in the survey. The share of respondents saying jobs were plentiful fell, while the share saying jobs were hard to get rose. Economists described the labor market as a “low hire, low fire” environment, as businesses hesitate amid uncertainty tied to tariffs and the lingering effects of higher interest rates. Recent job gains have been subdued, and the survey suggests households are noticing that shift.
Confidence readings matter for business because consumer spending is a key engine of U.S. economic activity. If pessimism persists, households may become more cautious, reducing discretionary purchases and increasing savings. Even if near-term spending holds up, companies often watch these indicators closely to guide hiring, inventory and investment decisions.
Why it matters for markets and policy
- Confidence declines can precede slower consumer spending, which can weigh on corporate earnings.
- Inflation expectations and tariff fears can influence purchasing decisions and pricing strategies.
- Policymakers may view the data as a warning on affordability and job creation in 2026.
The report adds to a picture of an economy that is still expanding but increasingly uneasy. Whether the confidence slide translates into weaker spending will be a central question for businesses and investors as 2026 begins.