US consumer confidence has plummeted to its lowest level since 2014, according to a recent report by The Conference Board. The Consumer Confidence Index for January fell by 9.7 points, reaching 84.5, a significant drop from December's revised reading of 94.2. This decline reflects growing anxiety among Americans regarding prices, the labor market, and the overall economic outlook.
The cutoff for preliminary results was January 16, 2026. Dana M. Peterson, Chief Economist at The Conference Board, stated that "Confidence collapsed in January, as consumer concerns about both the present situation and expectations for the future deepened". Peterson also noted that all five components of the index deteriorated, driving the overall index to its lowest level since May 2014, even surpassing the depths seen during the COVID-19 pandemic.
The Present Situation Index, which gauges consumers' assessment of current business and labor market conditions, experienced a sharp decline of 9.9 points, falling to 113.7 in January. This indicates a weakening perception of the current economic climate. The Expectations Index, reflecting consumers' short-term outlook for income, business, and labor market conditions, also fell considerably by 9.5 points to 65.1. This is well below the threshold of 80, which often signals a looming recession.
Specifically, consumers' views on current business conditions have worsened, with fewer respondents saying conditions were "good" (17.9%, down from 19.8% in December) and more saying they were "bad" (17.8%, up from 17.6%). The labor market also reflects this pessimistic trend; fewer consumers reported that jobs were "plentiful" (23.9%, down from 27.5% in December), while more said jobs were "hard to get" (20.8%, up from 19.1%). This marks the highest level since February 2021.
Consumers are also expressing less optimism about the future. Fewer Americans anticipate their incomes increasing over the next six months, and more expect fewer job opportunities to be available. The percentage of consumers expecting business conditions to improve decreased to 15.6% from 18.7% the previous month, while those expecting conditions to worsen increased to 22.9% from 21.3%.
This decline in confidence is also influencing spending habits. Consumers appear to be more cautious about making big-ticket purchases, such as cars and household appliances, and planned spending on services like healthcare and personal care has also decreased. According to The Conference Board, used cars, furniture, TVs, and smartphones remain the most popular items for future purchase within their respective categories.
Several factors are contributing to this erosion of consumer confidence. Elevated concerns about prices and inflation, particularly regarding oil and gas, and food and grocery costs, remain prominent. Mentions of tariffs and trade, politics, and the labor market have also increased, along with rising concerns about health/insurance and war.
In summary, the significant drop in consumer confidence to its lowest level since 2014 reflects growing anxieties about the current and future economic landscape. With concerns over prices, job availability, and overall business conditions, consumers are becoming more cautious in their spending and pessimistic in their outlook. This decline could have significant implications for the overall economy, particularly given that consumer spending accounts for a substantial portion of GDP.
