Consumer confidence dropped to its lowest point since 2014 in January, with survey respondents expressing concerns about a range of factors that affect the economy, The Conference Board said Tuesday (Jan. 27).
“References to prices and inflation, oil and gas prices, and food and grocery prices remained elevated,” Dana M. Peterson, chief economist at The Conference Board, said in a press release, summarizing consumers’ write-in responses. “Mentions of tariffs and trade, politics, and the labor market also rose in January, and references to health/insurance and war edged higher.”
These concerns drove a 9.7-point decline in the Consumer Confidence Index, lowering it to 84.5, according to the release.
Two components of the index that gauge consumers’ assessment of current business and labor market conditions, and their short-term outlook for income, business and labor market conditions, declined during the month. The Present Situation Index dropped by 9.9 points to 113.7, while the Expectations Index fell by 9.5 points to 65.1, per the release.
“Consumer confidence collapsed in January, as consumer concerns about both the present situation and expectations for the future deepened,” Peterson said in the release. “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 University of Michigan’s Index of Consumer Sentiment reported Friday (Jan. 23) that consumer outlook improved in January, reversing some of the sharp deterioration seen at the end of last year.
That Index rose from 52.9 in December to 56.4 in January, reflecting gains in both current conditions and expectations.
“However, national sentiment remains more than 20% below a year ago, as consumers continue to report pressures on their purchasing power stemming from high prices and the prospect of weakening labor markets,” Surveys of Consumers Director Joanne Hsu said in the report. “Aside from tariff policy, consumers do not appear to be connecting foreign developments to their views of the economy.”
The Federal Reserve Bank of New York said Jan. 8 that Americans are less confident about finding a job than they’ve been in the 12 years it has been producing its Survey of Consumer Expectations.