WASHINGTON, D.C.: Americans' outlook on the economy deteriorated sharply at the start of the year, with a key measure of consumer confidence tumbling in January to its lowest level in more than a decade as worries mounted over jobs, prices, and the broader economic outlook.
The Conference Board said that its consumer confidence index fell 9.7 points in January to 84.5, marking the weakest reading since 2014. The decline pushed confidence to levels even lower than those recorded during the COVID-19 pandemic.
A closely watched gauge of short-term expectations for income, business conditions, and the job market dropped 9.5 points to 65.1. That reading remains well under 80, a level that can signal a recession ahead, for the 12th consecutive month.
Americans' assessment of current economic conditions also worsened, with that component sliding 9.9 points to 113.7.
"Confidence collapsed in January, as consumer concerns about both the present situation and expectations for the future deepened," said Dana Peterson, the Conference Board's chief economist. "All five components of the index deteriorated, driving the overall index to its lowest level since May 2014, surpassing its COVID-19 pandemic depths."
Survey respondents continued to cite inflation pressures, including high gas and grocery prices. Mentions of tariffs and trade, politics, and the labor market increased in January, as did references to health insurance costs and war, the Conference Board said.
Perceptions of the job market weakened notably. The survey found that 23.9 percent of consumers said jobs were "plentiful," down from 27.5 percent in December. Meanwhile, the share saying jobs were "hard to get" rose to 20.8 percent from 19.1 percent a month earlier.
Economists say the labor market has settled into a "low hire, low fire" pattern, with employers hesitant to expand payrolls amid uncertainty over President Donald Trump's tariffs and the lingering effects of high interest rates.
Earlier this month, the government reported that employers added just 50,000 jobs in December, little changed from 56,000 in November. The unemployment rate stands at 4.4 percent.
Hiring has slowed significantly over the past year, particularly after Trump's April "liberation day" tariff announcement. Employers added only 584,000 jobs in 2025, a steep drop from the more than two million jobs created in 2024.
"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."
"This is a warning sign to policymakers that they need to focus on affordability and reviving hiring in 2026," Long added.
The slump in confidence comes even as the broader U.S. economy continues to grow. Supported by resilient consumer spending, the economy expanded at its fastest pace in two years from July through September, according to the government's latest estimate.
