Consumer confidence just hit another speed bump.
Consumer confidence collapsed in January, plunging to 84.5, its weakest reading since 2014 and well below all economist forecasts. The downturn erased December’s brief improvement, as households grew more pessimistic about both current conditions and the outlook.
What’s the problem?
Persistent anxiety around inflation, tariffs, and political uncertainty, even as headline economic growth looks solid. Geopolitical tensions, including conflicts involving Venezuela, Iran, and Greenland, also surfaced frequently in write‑ins, further dampening confidence.
The labor market is shifting, too. More people say jobs are harder to get, fewer say jobs are plentiful, and the gap between the two is the narrowest it’s been since early 2021.
For the first time in nearly four years, consumers feel worse about their family finances than better. And when confidence drops, so does spending: plans to buy homes, cars, appliances, and even take vacations all pull back.
Looking ahead, economists expect slower job growth, higher unemployment, and cooling wage gains in 2026, a mix that could keep confidence under strain.
