Consumer Confidence Hits Record Low in January

Ed Yardeni, the President of Yardeni Research, recently shared insights affecting the economy leading up to 2026 during a segment on “How to Make Money.” Meanwhile, data from the Conference Board reveals that U.S. consumer confidence has plummeted to its lowest level since 2014, raising concerns among Americans about the job market.

In January, the Consumer Confidence Report showed a significant drop of 9.7 points, bringing the index down to 84.5 from December’s revised figure of 94.2. Interestingly, the December data had initially suggested a decline but was later adjusted to indicate a slight increase. Yet, January’s numbers reflect a clear downturn.

The January reading of 84.5 marks the lowest since May 2014, when it fell to 82.2, surpassing even the worst levels seen during the COVID-19 pandemic. Dana M. Peterson, the chief economist at the Conference Board, noted that “Confidence collapsed in January as consumers grew more anxious about the present situation and their future expectations.” Every single component of the index deteriorated, signaling widespread concern.

The current status index, which gauges consumer perceptions regarding the economy, fell by 9.9 points to 113.7. This indicates a decline in outlook related to both the economy and employment. The expectations index, reflecting short-term views on income and job conditions, dropped by 9.5 points to 65.1, significantly below the typical benchmark of 80, hinting at potential recession signs ahead.

Moreover, expectations for future business and labor conditions have moved deeper into negative zones, while outlooks for household income are less optimistic than before. Notably, the deterioration in consumer confidence spans across various demographics—Democrats, Republicans, and independents alike marked a drop in confidence, with independents showing the sharpest decline.

The decline wasn’t limited to political affiliations; it also cut across age and income brackets. Interestingly, younger consumers under 35 appear to be more optimistic compared to their older counterparts, while those earning below $15,000 remain the least optimistic of the group.

Looking ahead, U.S. CEOs express increased fears about economic uncertainty compared to their global counterparts as we approach 2026. Consumer confidence data is set to be released alongside the upcoming Federal Reserve Board meeting, where it’s anticipated that interest rates will remain unchanged.

On the family financial front, there was a slight improvement in January from the revised December readings, which initially reflected a net decline. However, expectations about financial situations looking forward diminished, contrary to the prior month’s improvements.

Though fewer respondents believe there is a significant chance of recession in the next year, the sentiment that a recession is “very likely” has increased, alongside a slight uptick in those who think the U.S. is already in one.