Consumer confidence sank sharply in January to its weakest level since 2014, reflecting growing pessimism across income and age groups as concerns intensified about jobs, incomes and the broader economic outlook.
By yourNEWS Media Newsroom
U.S. consumer confidence dropped steeply in January, falling to its lowest level in more than a decade as Americans expressed rising concern about both present economic conditions and the months ahead. The Conference Board reported that its Consumer Confidence Index declined 9.7 points to 84.5 in January, down from an upwardly revised 94.2 in December and well below economists’ expectations of 90.0, according to a survey of forecasters.
The deterioration was broad and pronounced, affecting assessments of current conditions as well as expectations for the future. The Present Situation Index, which measures consumers’ views of current business and labor-market conditions, fell to 113.7 from 123.6. The Expectations Index, which reflects short-term outlooks for income, business activity and employment, dropped to 65.1 from December’s reading, remaining far below the 80 threshold the Conference Board has historically associated with elevated recession risk.
“Confidence collapsed in January, as consumer concerns about both the present situation and expectations for the future deepened,” said Dana M. Peterson, chief economist at the Conference Board. She noted that all five components of the index weakened during the month.
Labor-market sentiment showed notable strain. The share of consumers who said jobs were “plentiful” declined to 23.9 percent from 27.5 percent in December, while those who said jobs were “hard to get” rose to 20.8 percent from 19.1 percent. That narrowed the so-called labor-market differential—a closely watched indicator of employment conditions—to 3.1 from 8.4 in the prior month.
Income expectations also softened. Only 15.7 percent of respondents said they expect their incomes to increase in the coming months, down from 18.8 percent in December. Assessments of future business conditions and anticipated job availability deteriorated as well, reinforcing the overall downbeat outlook.
The decline in confidence was not confined to any single demographic group. The Conference Board reported broad-based weakness across age and income categories, with particularly sharp drops among consumers aged 35 to 54 and those earning more than $50,000 annually. Confidence levels for these groups fell to some of their lowest readings since 2013.
The Conference Board’s findings stood in contrast to results from the University of Michigan’s January consumer sentiment survey, which showed sentiment improving to 56.4 from 52.9 in December. Despite the modest rebound, respondents to the Michigan survey continued to report pressure from elevated prices. Interviews for that survey concluded on Jan. 19.
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