{"id":438617,"date":"2026-01-28T12:40:16","date_gmt":"2026-01-28T12:40:16","guid":{"rendered":"https:\/\/www.newsbeep.com\/ca\/438617\/"},"modified":"2026-01-28T12:40:16","modified_gmt":"2026-01-28T12:40:16","slug":"u-s-consumer-confidence-drops-to-lowest-level-since-spring-of-2014","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/ca\/438617\/","title":{"rendered":"U.S. consumer confidence drops to lowest level since spring of 2014"},"content":{"rendered":"

U.S. consumer confidence slumped to the lowest level in more than 11\u00bd years in January amid mounting anxiety over a sluggish labour market and high prices, which could see households becoming more cautious about spending. <\/p>\n

The surprise deterioration in confidence reported by the Conference Board on Tuesday was across political party affiliation, with survey respondents identifying as Independents the most pessimistic. It could add to pressure on U.S. President Donald Trump to address what economists and opponents have called an affordability crisis, which they have blamed on his policies, including sweeping tariffs on imports. <\/p>\n

While the relationship between confidence and consumer spending has been weak, some economists were concerned about the slump being accompanied by poor perceptions of the labour market. Consumers\u2019 views of job availability were the weakest in nearly five years. <\/p>\n

Nonetheless, economists did not expect the decline in confidence to influence the outcome of the Federal Reserve\u2019s policy meeting. The U.S. central bank is expected to leave interest rates unchanged on Wednesday. <\/p>\n

BoC and Fed expected to hold interest rates steady as trade uncertainty continues<\/a><\/p>\n

\u2018Trump and civil unrest are undermining confidence\u2019: U.S. dollar slides to a four-year low<\/a><\/p>\n

Consumers\u2019 expectations were the lowest in nine months, which some economists said flagged a slowdown in spending.<\/p>\n

\u201cAdmittedly, the expectations index has greatly overstated the weakness in spending in recent quarters,\u201d said Oliver Allen, senior U.S. economist at Pantheon Macroeconomics. <\/p>\n

\u201cBut we\u2019d be surprised if its recent deterioration proves to be an entirely false signal, particularly given the recent stagnation in real incomes and the already rock-bottom personal saving rate.\u201d<\/p>\n

The Conference Board\u2019s consumer confidence index plunged 9.7 points to 84.5 this month, the lowest level since May, 2014. Economists polled by Reuters had forecast the index at 90.9. <\/p>\n

The cut-off date for the survey was Jan. 16, well after the capture of Venezuelan President Nicol\u00e1s Maduro by U.S. forces.<\/p>\n

The drop was in contrast to the improvement in the University of Michigan\u2019s sentiment measure last week. The decline in confidence was sharpest among consumers 35 years and older as well as households with annual incomes below US$15,000 and those making US$50,000 and over. <\/p>\n

Confidence also fell among higher-income households. Higher-income households have largely been driving strong spending, which economists have called K-shaped, helping to underpin the economy even as job growth has almost stalled.<\/p>\n

\u201cReferences to prices and inflation, oil and gas prices, and food and grocery prices remained elevated,\u201d said Dana Peterson, chief economist at the Conference Board. \u201cMentions of tariffs and trade, politics and the labour market also rose, and references to health insurance and war edged higher.\u201d<\/p>\n

Investors largely shrugged off the deterioration in confidence. Stocks on Wall Street were trading higher. The dollar fell against a basket of currencies. U.S. Treasury yields were mixed.<\/p>\n

General Motors shares jump as automaker beats Street, hikes dividend<\/a><\/p>\n

The share of consumers who viewed jobs as being \u201cplentiful\u201d dropped to 23.9 per cent, the lowest since February, 2021, from 27.5 per cent last month. Some 20.8 per cent of consumers said jobs were \u201chard to get,\u201d also the highest since February, 2021, compared to 19.1 per cent in December. The survey\u2019s so-called labour market differential, derived from data on respondents\u2019 views on whether jobs are plentiful or hard to get, dropped to 3.1. That was also the lowest since February, 2021, and compared to 8.4 last month.<\/p>\n

This measure correlates to the unemployment rate in the Labour Department\u2019s monthly employment report. It raised the risk of the jobless rate creeping up this month from 4.4 per cent in December. Economists say the Trump administration\u2019s aggressive trade and immigration policies have reduced both demand for and supply of workers.<\/p>\n

Businesses are also unsure of their staffing needs as they invest heavily in artificial intelligence, limiting hiring.<\/p>\n

\u201cAn increasing share of consumers think there are fewer jobs available today,\u201d said Tim Quinlan, a senior economist at Wells Fargo. \u201cThat point alone isn\u2019t enough to cause households at large to stop spending, but it does result in some more cautious spending behavior, specifically those with less discretionary income like lower-income households.\u201d<\/p>\n

Fewer consumers planned to purchase big-ticket items over the next six months. Vacation was also not in the cards for many, while plans to buy a home dropped to a nine-month low. Trump last week signed an executive order restricting institutional investors from buying single-family homes as part of an effort to make housing more affordable. The Trump administration is also purchasing mortgage-backed securities, which initially led to a decline in mortgage rates.<\/p>\n

Economists and realtors, however, expect these measures would have a limited impact on housing affordability. They said more housing inventory, especially at the lower end of the market, was needed to address the problem.<\/p>\n

Homebuilding is being constrained by high material costs because of the tariffs, including on lumber, as well as high borrowing costs. There is also a shortage of labour that has been worsened by the immigration crackdown. Building lots are also scarce amid state and local government regulations.<\/p>\n

Tight inventory is keeping house prices high. A separate report from the Federal Housing Finance Agency showed single-family house prices increased 0.6 per cent on a month-over-month basis in November after rising 0.4 per cent in October. Prices climbed 1.9 per cent in the 12 months through November, after advancing 1.8 per cent in October.<\/p>\n

\u201cMortgage rates are now about 85 basis points lower than a year ago, while unsold inventory has been falling,\u201d said Alexandra Brown, North America economist at Capital Economics. \u201cThis should all put upward pressure on house price growth. We are forecasting house prices to rise by 3.5 per cent this year.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"U.S. consumer confidence slumped to the lowest level in more than 11\u00bd years in January amid mounting anxiety…\n","protected":false},"author":2,"featured_media":438618,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[901,888,902,879,877,903,45,49,48,876,895,896,891,878,875,46,549,295,894,887,914,880,881,893,889,890,884,904,885,909,910,912,907,911,905,908,882,898,899,714,897,906,865,61,900,892,886,883,913],"class_list":{"0":"post-438617","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-economy","8":"tag-alberta","9":"tag-arts-news","10":"tag-bc","11":"tag-breaking-news","12":"tag-breaking-news-video","13":"tag-british-columbia","14":"tag-business","15":"tag-ca","16":"tag-canada","17":"tag-canada-news","18":"tag-canada-sports","19":"tag-canada-sports-news","20":"tag-canada-trafficcanada-weather","21":"tag-canadian-breaking-news","22":"tag-canadian-news","23":"tag-economy","24":"tag-education","25":"tag-environment","26":"tag-federal-government","27":"tag-foreign-news","28":"tag-globe-and-mail","29":"tag-globe-and-mail-breaking-news","30":"tag-globe-and-mail-canada-news","31":"tag-government","32":"tag-life-news","33":"tag-lifestyle","34":"tag-local-news","35":"tag-manitoba","36":"tag-national-news","37":"tag-new-brunswick","38":"tag-newfoundland-and-labrador","39":"tag-northwest-territories","40":"tag-nova-scotia","41":"tag-nunavut","42":"tag-ontario","43":"tag-pei","44":"tag-photos","45":"tag-political-news","46":"tag-political-opinion","47":"tag-politics","48":"tag-politics-news","49":"tag-quebec","50":"tag-sports-news","51":"tag-technology","52":"tag-travel","53":"tag-trudeau","54":"tag-us-news","55":"tag-world-news","56":"tag-yukon"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/438617","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/comments?post=438617"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/438617\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media\/438618"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media?parent=438617"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/categories?post=438617"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/tags?post=438617"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}