U.S. consumer confidence dipped again in January, hitting 104.1, according to a business research group, marking a second consecutive monthly decline. This figure is worse than the forecast of 105.8 by economists. December’s reading was revised up by 4.8 points to 109.5 but still showed a decline from November.
The confidence index measures both consumers’ assessments of current economic conditions and their outlook for the next six months. Consumer sentiment remained positive heading into 2025, with holiday season spending remaining resolute despite higher borrowing costs. Retail sales rose 0.4% in December, reflecting strong demand during winter holidays.
December’s revised data indicated a slight improvement from November but still showed a decline overall. The board noted that consumers’ views on current conditions fell sharply to 134.3, the lowest since early 2021, and labor market concerns also dropped for the first time in nearly a year.
Short-term expectations for income, business, and the job market fell further, with a reading of 83.9 indicating some economic uncertainty. A reading below 80 can signal potential recession, but the proportion of consumers expecting a recession over the next 12 months remained at its lowest level on record.
While consumer spending has helped sustain the U.S. economy since the COVID-19 trough in early 2020, recent data suggests it may be stabilizing. The Federal Reserve reported that credit card balances and delinquencies are rising, with active cardholders making only the minimum payment at a 12-year high.
A slight decline in consumers’ plans to purchase “big-ticket” items in the next six months was noted. Consumer spending accounts for about two-thirds of U.S. economic activity and remains a critical indicator of overall economic sentiment.
Source: https://apnews.com/article/consumer-confidence-conference-board-spending-economy-31aab08b4281d3d23961c5c25fef6cca