U.S. Consumer Confidence Tumbles to Lowest Level in Over Ten Years

(MENAFN) American consumer sentiment has nosedived to its weakest point in over ten years, as citizens express mounting anxiety over geopolitical instability, persistent inflation, and potential trade policy consequences, The Conference Board disclosed Tuesday.

Preliminary findings from the organization's monthly survey indicate the U.S. Consumer Confidence Index plummeted 9.7 points from December to 84.5 in January, representing the weakest measurement since May 2014 and exceeding the nadirs witnessed during the peak of the COVID-19 pandemic in 2020.

"Confidence collapsed in January, as consumer concerns about both the present situation and expectations for the future deepened," said Dana Peterson, chief economist of The Conference Board. "All five components of the Index deteriorated."

The analysis emphasized that the Expectations Index, which gauges consumers' near-term projections for income, business and labor market conditions, tumbled 9.5 points to 65.1, substantially beneath the 80 threshold that historically signals a recession is ahead. The Present Situation Index also declined significantly, dropping 9.9 points to 113.7.

Survey data attributes the deteriorating sentiment to multiple converging elements. Peterson observed that consumers' write-in responses skewed toward pessimism, with elevated references to inflation, specifically food and gas prices. Additionally, mentions of tariffs, trade policies, politics and war rose in January.

Labor market perceptions also exhibited vulnerability. The labor market differential, which means the gap between those seeing jobs as "plentiful" versus "hard to get," continued to flag. "Expectations for business and labor market conditions six months from now fell further into negative territory," the report said.

The pessimistic perspective is affecting purchasing behavior. Consumers became more cautious about purchasing big-ticket items, with buying intentions for homes, furniture and appliances all retreating, it was reported. While plans to buy used cars climbed, expectations for purchasing new cars faltered.

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