Consumer Confidence Hits Decade-Long Low
New data from The Conference Board shows U.S. consumer confidence dropped to 84.5 in January, the lowest level since May 2014. This reflects widespread pessimism about the economy and job market. The figure fell below analysts' expectations and indicates a growing loss of confidence among American households.
Key Factors Behind the Decline
The drop in confidence is mainly attributed to concerns over high inflation and weak job growth. Although confidence briefly rebounded in December, the overall trend remained downward. The expectations index, which measures outlook for the next six months, fell to its lowest level since April 2021, while the present situation index dropped to a nearly five-year low.
Job Market and Income Expectations Weaken
- The percentage of consumers who say jobs are 'hard to get' hit a high not seen since early 2021.
- Those who believe jobs are 'plentiful' declined, narrowing the gap to one of the worst readings in years.
- Fewer Americans expect their incomes to rise over the coming months.
Dana Peterson, Chief Economist at The Conference Board, noted that consumers frequently cited rising gas and grocery prices in open-ended responses. There was also an increase in mentions of political issues, healthcare concerns, and labor market uncertainty.