U.S. Consumer Confidence Plunges to More Than a Decade Low in January 2026

In January 2026, U.S. consumer confidence fell sharply, dropping to its lowest level in more than 12 years as Americans expressed deepening pessimism about the economy outlook, labor market conditions, and personal finances. The downturn, reported by the Conference Board’s monthly survey, signals growing concern among households about price pressures, job prospects, and broader economic uncertainty. Sometimes it's hard to see the practical nature of these numbers, but my wife and I are starting to see the impacts of the K shaped economy first hand.

According to the Conference Board’s Consumer Confidence Index released at the end of January, the index plunged 9.7 points from December, settling at 84.5 the lowest reading since May 2014. Economists had expected a more modest decline, with forecasts near 90.9, but the actual drop well exceeded those expectations.The survey measures two key components:

1. Present Situation Index — Consumers’ assessment of current economic conditions

2. Expectations Index — Outlook for income, business conditions, and employment over the next six months.

In January, both components deteriorated sharply. The Expectations Index fell to 65.1, well below the critical threshold of 80 that often signals rising recession risk, while current conditions also weakened substantially.

So what’s driving the drop? The slide in confidence reflects a range of concerns among American households. We all have been talking about it, but inflation and cost pressures is the primary driver. Consumers continue to cite elevated prices for essentials like food, gas, and housing. Although official inflation measures have moderated from recent peaks, persistent price pressures weigh on household budgets. The there's tariffs and trade uncertainty. Elevated trade tensions and tariff policies appear to be contributing to anxiety about the cost of goods and economic stability.I'm also noticing a sluggish job market in my area which seems to be widespread it was cited that job growth has been weak. Only modest employment gains in late 2025 have fostered a “low hire, low fire” labor market environment, leaving many workers feeling insecure about job prospects and income growth.

All I know is I see it now and my outlook has collapsed to its lowest level which is in support of this report. I'm hoping things don't get as bad as I think they could....