It’s a major metric that tells the experts a lot about the state of the economy. And it’s telling a sad tale. The official index of US Consumer Confidence is at its lowest point since 2014. And unrelenting high food prices are at the top of the list of concerns…
“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,” CNN reports. “January’s reading came in much lower than the 91.1 reading economists projected in a poll by data firm FactSet.”
Troubling news…
“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 Con-ference Board, said in a release.
“References to prices and inflation, oil and gas prices, and food and grocery prices remained elevat-ed.” she added. “Mentions of tariffs and trade, politics, and the labour market also rose in January, and references to health/insurance and war edged higher.”
Overall downward pressure…
“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. “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 labour market and rising prices.”
Meanwhile… The Treasury Department expects tax refunds will increase by an average of $1,000 this year per household.
‘Expect unemployment to rise’
More than half the respondents to the latest Conference Board survey (55 percent) said they were pessimistic about the labour 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 percent unemployment in (the second quarter). […] This will weigh on retail sales in these coming months,” he added.
My take
A reading above 100 indicates rising optimism and higher future spending, while a level below 100 signals pessimism and reduced spending. And that can predict economic growth or a downturn, respectively. The latest reading is 84.5.
Conclusion? In spite of all of President Donald Trump’s boasts about the economy… It’s clear that the average American is keeping their hands – and dollars – in their pocket. The lack of spending is a bottleneck in the greater economic cycle which will, in turn, affect all the other segments of the economy.
~ Maggie J.