Consumer confidence fell sharply to its lowest level in nearly two years in January as Americans marked the beginning of President Donald Trump’s presidency. The Conference Board’s latest survey revealed a sharp decline in both the present situation and expectations indices, signaling concerns about the current economy and future outlook.
December’s data was slightly upward revised, but January saw a notable dip as consumers expressed pessimism about their personal financial conditions. The present situation index dropped by 9.7 points to 134.3, while the expectations index fell by 2.6 points to 83.9. Both metrics remain above the threshold that typically signals an incoming recession.
Among the factors contributing to the decline were lower assessments of the current labor market and business conditions. Consumers also expressed less optimism about future employment prospects and income growth. Notably, younger consumers (under 55) saw their confidence fall more sharply, while older adults experienced a slight uptick. Households with the highest incomes reported the sharpest declines in confidence.
Despite these challenges, some positive trends emerged. Six-month financial expectations for families reached a new high, and only a small percentage of consumers expected a recession over the next year. Meanwhile, corporate leaders viewed Trump’s policies favorably, while analysts were skeptical about the broader impact of tariffs on key trading partners.
Home prices showed modest growth in November, with increases observed in major markets like New York and Chicago. However, national home price trends remain below historical averages, signaling a cooling housing market amid slower economic conditions.
Overall, January marked a challenging period for consumers as they navigated an uncertain economic landscape shaped by President Trump’s policies and broader global factors.
Source: https://www.usnews.com/news/economy/articles/2025-01-28/consumers-start-2025-and-trump-2-0-on-a-sour-note