U.S. Consumer Confidence Plunges to Lowest Level in More Than a Decade as Economic Anxiety Intensifies

BY EMMANUEL OGBONNA

U.S. consumer confidence dropped sharply in January, sinking to its lowest level in more than a decade as Americans grew increasingly uneasy about their financial future, the job market and the broader direction of the economy.

According to data released Tuesday by the Conference Board, its consumer confidence index fell 9.7 points to 84.5 in January, marking a dramatic decline that pushed the gauge below levels recorded even during the depths of the COVID-19 pandemic. The latest reading represents the weakest sentiment since 2014, underscoring how rapidly household optimism has deteriorated at the start of the year.

The survey showed particularly severe erosion in Americans’ expectations about the near-term outlook. The expectations index, which tracks consumers’ views on income, business conditions and employment prospects over the next six months, dropped 9.5 points to 65.1. That figure remains far below 80, a threshold economists often view as a signal of heightened recession risk, and marks the twelfth straight month that expectations have stayed under that level.

At the same time, perceptions of current economic conditions also worsened significantly. The present situation index slid by 9.9 points to 113.7, indicating that Americans are increasingly dissatisfied not only with what lies ahead but also with their immediate financial circumstances.

“Confidence collapsed in January as concerns about both the present situation and future expectations deepened,” said Dana Peterson, the Conference Board’s chief economist. “All five components of the index deteriorated, pushing overall confidence to its lowest point since May 2014 and surpassing the depths seen during the pandemic.”

Survey responses revealed that inflation remains a dominant worry for U.S. households. Mentions of rising prices for essentials such as gasoline and groceries remained elevated, while concerns about tariffs, trade policy and political uncertainty increased sharply. Respondents also cited anxieties about the labor market, health insurance costs and global conflicts, reflecting a broad sense of economic and geopolitical unease.

Perceptions of the job market weakened further in January. The share of consumers who said jobs were plentiful fell to 23.9%, down from 27.5% in December. Meanwhile, the percentage of respondents who said jobs were hard to get climbed to 20.8%, up from 19.1% a month earlier. The shift suggests that Americans are increasingly encountering—or anticipating—difficulty finding employment.

Economists say the U.S. labor market has entered a prolonged period of sluggish hiring and limited layoffs, a pattern sometimes described as “low hire, low fire.” Businesses have been reluctant to expand payrolls amid uncertainty over trade policy and the lingering effects of high interest rates, which have raised borrowing costs and dampened investment.

Recent government data highlight the slowdown. Employers added just 50,000 jobs in December, barely changed from November’s gain of 56,000. The unemployment rate stands at 4.4%, relatively low by historical standards but increasingly accompanied by weak hiring momentum. Over the course of 2025, the economy added only 584,000 jobs, a steep drop from more than 2 million jobs created in 2024.

Much of the slowdown followed the tariff announcement in April, which injected fresh uncertainty into business planning and global supply chains. Since then, job growth has remained subdued, particularly in sectors sensitive to trade and manufacturing costs.

“The dramatic drop in confidence is a direct result of the hiring recession,” said Heather Long, chief economist at Navy Federal Credit Union. “The fact that 2025 was the weakest year for job gains outside of a recession since 2003 is not going over well with the middle class.”

Long warned that the latest data should serve as a wake-up call for policymakers. “This is a warning sign that leaders need to focus on affordability and reviving hiring in 2026,” she said, pointing to persistent cost pressures and fragile labor market conditions as key threats to economic stability.

The decline in confidence comes at a time when the broader U.S. economy continues to expand, often outperforming expectations. Driven by resilient consumer spending, economic growth reached its fastest pace in two years during the third quarter of last year, according to the government’s most recent estimates.

Yet the widening gap between headline economic growth and household sentiment suggests that many Americans feel left behind by the recovery. With inflation still squeezing budgets, hiring slowing and uncertainty clouding the outlook, the sharp drop in confidence signals a fragile mood that could weigh on spending and economic momentum in the months ahead.