• Conference Board index drops 9.7 points to 84.5, below COVID-19 pandemic lows
• Expectations reading marks 12th consecutive month below recession threshold
• Labor market perceptions worsen as hiring recession deepens

WASHINGTON (TDR) — U.S. consumer confidence declined sharply in January, hitting the lowest level since 2014 as Americans grow increasingly concerned about their financial prospects and the job market, according to new data released Tuesday.

The Conference Board said its Consumer Confidence Index cratered 9.7 points to 84.5 in January, falling below even the lowest readings during the COVID-19 pandemic.

"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 Index Components Deteriorate

The January reading fell well below economists' projected 91.1 index reading, according to FactSet polling data. The drop was driven by broad weakness in both assessments of current conditions and expectations for the future.

"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," Peterson said in a release.

The Present Situation Index, which measures consumers' assessment of current business and labor market conditions, dropped by 9.9 points to 113.7 in January.

A measure of Americans' short-term expectations for their income, business conditions and the job market tumbled 9.5 points to 65.1, well below 80, the marker that can signal a recession ahead. It's the 12th consecutive month that reading has come in under 80.

Inflation And Tariff Concerns Drive Pessimism

Respondents' references to inflation, including gas and grocery prices, remained elevated in the January survey.

"References to prices and inflation, oil and gas prices, and food and grocery prices remained elevated," Peterson said.

"Mentions of tariffs and trade, politics, and the labor market also rose in January, while references to health/insurance and war edged higher," she added.

Peterson noted that references to war could refer to the Trump administration's seizure of power in Venezuela and its desire to acquire Greenland.

Freedom-Loving Beachwear by Red Beach Nation - Save 10% With Code RVM10

The worries about health and insurance also track with the ending of expanded subsidies and subsequent reports of higher premiums for Americans who receive health insurance coverage through the Affordable Care Act.

Labor Market Perceptions Worsen Significantly

Perceptions of the job market declined notably this month. The Conference Board's survey reported that 23.9% of consumers said jobs were "plentiful," down from 27.5% in December.

Meanwhile, 20.8% of consumers said jobs were "hard to get," up from 19.1% the month previous. This narrowed the so-called labor-market differential to 3.1 from 8.4. Economists watch this differential closely to gauge how people feel about job prospects.

According to the latest Conference Board survey, more than 55% of respondents said that it was difficult to land a job, the highest share since the pandemic.

The country's labor market has been stuck in a "low hire, low fire" state, economists say, as businesses stand pat due to uncertainty over Trump's tariffs and the lingering effects of elevated interest rates.

Hiring Recession Blamed For Confidence Drop

Heather Long, chief economist at Navy Federal Credit Union, directly linked the confidence collapse to ongoing hiring weakness.

"The dramatic drop on confidence is a direct result of the hiring recession," Long said.

"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," she added.

Earlier this month, the government reported that employers added just 50,000 jobs in December, nearly unchanged from 56,000 in November. The unemployment rate is 4.4%.

CLICK HERE TO READ MORE FROM THE THE DUPREE REPORT

Job gains have been subdued all year, particularly after April's "liberation day" tariff announcement by Trump. The economy gained just 584,000 jobs in 2025, sharply lower than the more than 2 million added in 2024.

"This is a warning sign to policymakers that they need to focus on affordability and reviving hiring in 2026," Long said.

Economic Growth Continues Despite Confidence Drop

The softening job market comes even as the U.S. economy keeps growing, often beyond projections. Powered by strong consumer spending, the U.S. economy grew at the fastest pace in two years from July through September, according to the government's latest estimate.

Ben Ayers, senior economist at Nationwide, warned that the confidence plunge could signal trouble ahead for consumer spending.

"While spending held up through the holidays, the latest plunge in the survey readings flashes a warning sign for weaker activity over the first quarter of 2026," Ayers said in an analyst note Tuesday.

"Still, we expect that larger tax refunds and additional fiscal stimulus will provide a shot in the arm for many households worried about a softening labor market and rising prices," he added.

The tax-filing season has officially begun and the Treasury Department projects tax refunds will increase by an average of $1,000 this year per household.

Contrast With University Of Michigan Survey

The Conference Board results contrasted with the University of Michigan's January consumer sentiment survey, which showed sentiment improving to 56.4 from 52.9 in December, even as respondents still reported strains from high prices.

Interviews for the Michigan survey ended January 19, while the Conference Board survey cutoff for preliminary results was January 16.

The University of Michigan survey found that international events, besides tariffs, did not seem to be factoring into consumers' economic outlook.

Spending Plans Show Mixed Signals

Despite the sharp decline in confidence, the Conference Board survey showed consumers still intended to spend more on certain categories in the first half of 2026.

In January, restaurants, bars, and take-out remained the top planned services spending category and continued to rise. Consumers also intended to spend more on hotels/motels for personal travel, motor vehicle services, household maintenance, and airfare/trains for personal travel.

The increased intentions to spend more on travel-related services in the first half of 2026 was surprising, given the plunge in vacation plans, especially for domestic travel, also recorded in the survey.

Will the sustained decline in consumer confidence and expectations below recession thresholds force policymakers to prioritize job creation and affordability measures in 2026?

Sources

This report was compiled using information from The Conference Board's official consumer confidence release, Associated Press reporting, Breitbart's economic analysis, CNN's coverage, RISMedia's reporting, KSAT's coverage, and statements by Dana Peterson at The Conference Board and Heather Long at Navy Federal Credit Union.

Freedom-Loving Beachwear by Red Beach Nation - Save 10% With Code RVM10