Consumer confidence collapses to lowest level since 2014

By Bryan Mena, CNN

Washington (CNN) — America’s economic mood deteriorated in January to its lowest level in more than a decade as consumers fretted about geopolitical tensions, affordability and President Donald Trump’s unrelenting trade war.

The Conference Board’s Consumer Confidence Index for January, released Tuesday, declined 9.7 points to a reading of 84.5, the lowest since 2014, surpassing the lows of last year when Trump unveiled stiff tariffs and the depths of the pandemic recession in 2020.

January’s reading came in much lower than the 91.1 reading economists projected in a poll by data firm FactSet.

The survey’s indexes for how Americans feel about current economic conditions and their expectations for the US economy’s future both fell sharply this month.

“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,” Dana Peterson, chief economist at The Conference Board, said in a release. “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,” she added.

Over the past month, the Trump administration has captured Venezuela’s former leader; threatened massive tariffs on Canada and European countries; declared its intentions to purchase Greenland; and has continued to pile pressure onto the politically independent Federal Reserve.

US consumers also remain frustrated with the country’s higher cost of living these days, especially with employers hiring at a weak pace and people insured through the Affordable Care Act seeing their premiums skyrocket.

“Americans are frustrated with rising prices for groceries and electricity, and they are fearful of the hiring recession that’s underway right now,” Heather Long, Navy Federal Credit Union’s chief economist, said in commentary issued Tuesday. “The K-shaped economy is great for the top 20%, but many middle-class and moderate-income Americans are barely keeping up.”

What it means for economic growth and spending in early 2026

In recent years, pessimism among Americans hasn’t translated into weaker spending, which may remain the case this time around, especially with tax filers expected to receive bigger refunds.

In the summer of 2022 as inflation reached a four-decade high and consumer confidence tanked, Americans continued to spend in the following months. The same was true last year, when Trump’s tariffs caused Americans to sour on the economy.

“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,” Ben Ayers, senior economist at Nationwide, 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.”

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.

But weak job growth is expected to persist throughout the year, according to most economists. That’s especially a problem for recent college graduates and people who have been laid off.

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. Respondents also indicated they’re pessimistic about the path of the labor market.

Jeffrey Roach, chief economist at LPL Financial, echoed that sentiment in a note Tuesday, writing: “Expect the unemployment rate to rise.”

“My expectation is the domestic economy could approach 4.6% unemployment in (the second quarter) with upside risks later in the year. This will weigh on retail sales in these coming months,” he added.

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