“Confidence collapsed in January.” But Why?
The Conference Board notes US Consumer Confidence Fell Sharply in January
Confidence collapsed to lowest point since 2014, surpassing pandemic depths
The Conference Board Consumer Confidence Index® fell by 9.7 points in January to 84.5 (1985=100), from an upwardly revised 94.2 in December. A 5.1-point upward revision to December’s reading of the Index resulted in a slight increase last month, reversing the initially reported decline. However, January’s preliminary results showed confidence resumed declining after a one-month uptick.
The Present Situation Index—based on consumers’ assessment of current business and labor market conditions—dropped by 9.9 points to 113.7 in January. The Expectations Index—based on consumers’ short-term outlook for income, business, and labor market conditions—fell by 9.5 points to 65.1, well below the threshold of 80 that usually signals a recession ahead. The cutoff for preliminary results was January 16, 2026.
Consumer Confidence Present Situation and Expectations
“Confidence collapsed in January, as consumer concerns about both the present situation and expectations for the future deepened,” said Dana M Peterson, Chief Economist, The Conference Board. “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 Present Situation Index fell, as net views on current business conditions dwindled to just barely positive, at +0.1%. Perceptions of employment conditions also edged lower, with the labor market differential—the share of consumers saying jobs are “plentiful” minus the share saying jobs are “hard to get”—continuing to flag. All three Expectations Index components also weakened in January. Expectations for business and labor market conditions six months from now fell further into negative territory. The outlook for household incomes became less positive.
Among demographic groups, confidence on a six-month moving average basis dipped for all age groups in January, although consumers under 35 continued to be more confident than consumers age 35 and older. Confidence among all generations trended downward in the month, but Gen Z remained the most optimistic of all generations surveyed. By income, confidence on a six-month moving average basis ticked downward for all brackets, and consumers earning less than $15K remained the least optimistic among all income groups. Consumer confidence continued to fade in January among all political affiliations, with the sharpest decline among Independents.
Peterson added: “Consumers’ write-in responses on factors affecting the economy continued to skew towards pessimism. References to prices and inflation, oil and gas prices, and food and grocery prices remained elevated. Mentions of tariffs and trade, politics, and the labor market also rose in January, and references to health/insurance and war edged higher.”
Homebuying expectations continued to retreat. Plans to purchase refrigerators, dishwashers, furniture, and TVs decreased. Plans to buy electronics dipped in all categories besides smartphones, which continued to trend upward on a six-month moving average basis. Used cars, furniture, TVs, and smartphones remained the most popular within their categories for future purchases.
The only surprise in the report is Gen Z. They are the generation most impacted by inflation and jobs.
Labor Market Notes
- 23.9% of consumers said jobs were “plentiful,” down from 27.5% in December.
- 20.8% of consumers said jobs were “hard to get,” up from 19.1%.
- Only 13.9% of consumers expected more jobs to be available six months from now, down from 17.4% in December.
Much more in the report.
Is the Plunge That Shocking?
I Think We “Should” All Agree
Vance and Miller Justify Murder
Steve Miller, J.D. Vance and Homeland Secretary Kristi Noem are the scummiest of the scum.
Is it any wonder confidence is sinking?
Given the Nazi slogans of Noem, and the Gestapo tactics of ICE, does anyone doubt that?
Is it any wonder confidence is sinking?
America Screamed Loudly
Please note America Screamed Loudly and President Trump Blinked
Trump demoted Border Patrol Commander Greg Bovino. One down. Many coming.
Today we heard echoes of those screams. The echoes are in the form of two Conference Board charts.
Midterm elections coming up so anyone with loss of confidence can vote against BOTH the Republicans and Democrats whose endless overspending and debt is what got us here, and vote for Libertarian candidates, which are the only choice on the ballot for a balanced budget. How much decrease in confidence would it take to reduce the Uniparty vote to even 95 percent, from the 98 or 99 percent it has been for a long time? A lot of people seem pretty comfortable with how things are, maybe not aware of or appreciating the risks or thinking they have to take a ‘side’ of the ICE thing, but could that be what TPTB wants them to think?
Just anecdotal: I retired recently, but a couple of months ago I had a business. We could never hire people, even paying staring wages of $24/hr with full benefits (401(k), paid holidays, paid vacation, health insurance).
I was talking to a friend, 54yrs old, who told me all three of his grown daughters had moved back in with him.
“It’s bad out there! None of them can find work.”
There are jobs out there such as at grocery stores, home care, restaurants. Some people might not want to do contruction but there are openings if they would want to try it. I think prospective employers like to see people that took whatever work they could find as opposed to long periods out of work. Plus taking any job lets a person continue to contribute to Social Security, so they have more benefit when they retire. What kind of work was the $24 per hour with benefits jobs?
Maybe if the criminals could be picked up directly from prisons, there wouldn’t be so many problems. Liberal politicians won’t allow that though, because it smacks too much of common sense.Better to have criminal hunts, “in the field”.
“Those who trade security for liberty will lose both.”
Paraphrase of Ben Franklin.
Door-to-door sweeps are a violation of the Constitution. Just because you want to trade away your Constitutional rights for “criminal hunts” doesn’t mean I am willing to submit like you.
You completely ignored my comment. There wouldn’t be door-to-door sweeps if ICE officers could pick up the criminals directly from the prisons that the judges (most of whom are liberal) placed them in for their crimes.
Trump has some work to do to turn around this indicator like he did in his first term.
Been trending down since Biden was elected.
So much negative press this indicator may not be any good anymore.
Many people doing well will be negative because there girl didn’t get elected!
Did you read the text? Independents views declined the most.
The inflation we are experiencing now was so easy to predict back during Covid. Hopefully all these debt based fiat currency experiments are winding down and our fin-tech overlords will allow productive humans a chance to recover.
Call a recession already.
Most people experiencing a hyper-inflationary depression tend to display little in the way of “confidence”.
Trump has pulled his face out of a trough of greasy hamburgers long enough to see that his plan has backfired bigly. He is despised across the political spectrum and around the world. Read this morning that ICE is supposed to provide additional security at the 2026 Olympics in Italy. Wonder how long before they’re booted out?
Have you ever been to Italy? They have the Carabinieri all over the place there who walk around with machine guns and body armor. They need ICE there like a hole-in-the-head (no pun intended).
As a Constitution-respecting and Olympics-loving American, it is my duty to be in favor of the Winter Olympics banning the USA contingent from the Olympics altogether due to the ICE contingent. Half measures are a thing we used to need, now we need full measures.
Tell us what positive value ICE will provide over there, other than for Trump’s bloated, narcissistic ego?
Trump has a typical response of doubling down on a mistake. He tries to bluff his way through any error or mistake. However you can’t bluff reality. Eventually the laws of nature hold.
So what is there to be optimistic about? Eventually the chickens come home to roost.
If all the Gold Gaps of 2026 close we will be right back at $4314 an ounce. This market is not rational.
Hasn’t been for decades. It’s a casino that certain people are allowed to cheat in.
Let us know when you find a world filled with rational markets, and then “Beam us up, Scotty”
Every post is one amazing tasty morsel.
3-Star Mishelin award granted again! Two on the same day! Unheard of but well deserved.
I think those types of people and the actions they carry out, which are similar across both parties, are put there on purpose, as a distraction from the deficit spending of both parties, to polarize the populace like the ends of a bar magnet so they will go and and passionately vote for either R or D again in whatever election is next, but either way, theyll be voting for the same group and their bad policies.
Leaving the now non-stop inflammatory politics and word choices of this blog aside, commenting only into the economic analysis: Incessant, unrelenting inflation. Inflation = Uncertainty. Constant inflation = Vice-like pressure on people’s psyche/wallets; Inflation where consumers see it EVERY. SINGLE. DAY. Crushing! Grocery prices are insane if you do not have the time to shop sales OR…as is the case more now than ever..the sales are fewer and further between and not as lucrative as in the past. Open the electricity bill, propane/gas bill now that we are experiencing a colder-than-normal winter, homeowners insurance, health insurance (my premium $100+/month this year), services inflation (home repair, hvac, plumbing, auto), health care costs and deductibles all massively higher.
With more folks out of the workforce a large swath on fixed income is under stress. Those working need to stay working to afford the inflation so job loss is a huge bang-moment worry.
Inflation.
It’s so much simpler than folks make it–in Japan, for 3 decades they had no inflation and they were happy happy folks. Things are deteriorating there as a recent blog post mentioned. Inflation is THE angst driver. It puts pressure on every transaction in your life. Sure the markets are at all time highs as is real estate but if you don’t own it, you feel helpless and hopeless to get in on the action and you are getting less for the same price. You aren’t seeling your primiary residence and most don’t sell stocks to consume only as a last resort. Someone once said that confidence comes from the perception of the permanence of your current income and its ability to hold its purchasing power. Inflation destroys that and unemployment will be a death blow.
Clinton advisor Carville said “it’s the economy, stupid”.
For consumer confidence it’s inflation. In the past the 2 big things influencing that were gas prices visible at every corner and the stock market. Now it’s every price that’s inflated. It may have retreated from 2021-2024 levels but that move is still being digested by consumers as much of it was absorbed by stimulus and govt programs. Those are gone but the prices remain–and they are still going up from very high levels.
Inflation. Inflation. Inflation.
Stocks rise by manipulatiion raising prices That’s inflation. Tarrifs, Sanctions and Chaos raise prices That’s inflation, Silver , Gold , Copper prices, Cryptos THAT’s Inflation. THE MARKETS ARE CONTROLLED and ONLY GO UP and UP MARKETS CREATE INFLATION.
‘cept for all the times they didn’t go up, including times of tariffs, sanctions, chaos. Live through 2001-2003, 2008-2009…sure they eventually went back up….but if the music stopped for you in those times or you needed money, they actually did go down. Our weird need to do moar when prices have flattened has made the pain when the accelerator kicks in more devastating to cofidence than had we just endured the 2008/9 slowdown without reigniting with gas. Patience and restraint are a hard sell for politicians on a 2 year window, esp when debt-spending seemingly comes without a cost in the short run.
“inflation is always and everywhere a monetary phenomenon.” – some egghead
If you think inflation is bad now, you are in for a very rude awakening in 2030. There will be 80 million socialist leeches asking for free money handouts and subsidized healthcare of which they will need a great deal.
The social program costs alone will balloon into 4 or 5 trillion per year at a time the US is experiencing demographic decline, de-globalization (no more low cost goods from China) and anti-immigration that will have a lasting impact for at least a decade or longer. Throw in a brain drain, young people that have an entirely different work ethic and are happy to say F* You to the boomers and you’re in real trouble (if you’re a boomer).
Your future is nothing but inflation. I hope you have a plan to deal with it.
I have an exit strategy as my plan.
Agreed. I was merely commenting on the why.
Not a Boomer. Still I won’t be alive to see the global demographic shift.
Unlike you I am not moving to Asia so I will be here for the period you mention, assuming health holds of course. It won’t be a rude awakening but I’m sure I’ll still be shocked at what measures will be taken and attempted to forestall inevitable pain. It’s more of a Lisa Simpson fatalism about it: “I warned ya, and yet my punishment is no less severe. That’s odd.”
Still I maintain that inflation brings the uncertainty that more directly and immediately moves the consumer confidence index downward as it cuts across all demographics, more so than unemployment. It’s taken until now for it work its compounding nature as the significantly larger inflation numbers were offset by stimulus measures pulled forward for just that reason. Now the prices remain high without the offsets.
With real incomes not keeping up it’s not surprising the consumer confidence is in the cellar.
Exit strategy:
You can pack me in a suitcase but i guess my family is here for the duration thus here is where i shall perish.
Stop Making Sense.
Midterms coming up but the people unhappy about inflation keep thinking they have to vote either Republican or Democrat, when its the deficit spending of both that causes this inflation. Libertarian, the only choice for a balanced budget, has been on the ballot for years and will be again for midterms.
Consumer confidence is worthless as an indicator.
Gen Z doesn’t have kids.
I think that’s why their glasses are rosier.
Many of them will never have kids. That won’t make anyone over the age of 40’s glasses rosier any time soon, when it comes to what we paid into the system all these years.
We didn’t pay in. The funds were forcibly extracted from us. I am middle age; if they would let me opt out of Social Insecurity in exchange for keeping everything I have paid in, I’d do it. Assuming my employer increases my salary 6.2%.
A lot of people might say the same as you, let me keep my SS contributions, but people fall on hard times and end up old and poor and SS is there so we dont have a bunch of elderly homeless people which would be appalling.
Conference board #’s definitely are sensitive to politics, but the tightness of the correlation between the labor market differential and the unemployment rate suggests that it’s more than just politics this month. I think it says people’s lived experience with jobs isn’t meshing with the numbers well. A low-hire/low fire labor market is pretty unusual – people won’t always know what to make of it. Add political uncertainty to that, and I think you can hit a tipping point easily enough.
There’s a gooooolden feeling in the air…
Consistent with taco’s performance and poll numbers across the board. Time for a change.