Topline<\/p>\n
The consumer confidence index \u201ccollapsed\u201d to its lowest point in more than a decade, the Conference Board think tank reported Tuesday, as pessimistic views of the economy and labor market appeared to spread among Americans. <\/p>\n
An earlier survey of Americans found consumers had grown more optimistic about the economy. <\/p>\n
Los Angeles Times via Getty ImagesKey Facts<\/p>\n
The consumer confidence index, a measurement of how optimistic or pessimistic Americans feel about the economy, dropped to 84.5 in January from December\u2019s revised-up reading of 94.2, down from a 100-point baseline set in 1986 and the measurement\u2019s lowest level since May 2014 (82.2).<\/p>\n
That falls well below Wall Street\u2019s estimates of 91.1, according to FactSet.<\/p>\n
Consumers\u2019 views about current business conditions worsened through the month, with 17.9% of respondents indicating conditions were \u201cgood,\u201d down from 19.8% in December, and 17.8% said conditions were \u201cbad,\u201d up from 17.6%.<\/p>\n
Views of the labor market also deteriorated, as 23.9% of consumers said jobs were \u201cplentiful,\u201d down from 27.5% in December, and 20.8% said jobs were \u201chard to get,\u201d up from 19.1% and the highest since February 2021.<\/p>\n
How Do Americans Feel About The Future?<\/p>\n
Fewer Americans believe their incomes will increase over the next six months, and even more expect fewer jobs to be available, according to the Conference Board. About 15.6% of consumers expect business conditions to improve, down from last month\u2019s reading of 18.7%, and 22.9% expect conditions to worsen, up from 21.3%. Consumers appeared more cautious about plans for buying big-ticket items, such as cars and household appliances, and planned spending on services like health care and personal care also declined. <\/p>\n
Crucial Quote<\/p>\n
\u201cConfidence collapsed in January, as consumer concerns about the present situation and expectations for the future deepened,\u201d said Dana Peterson, the Conference Board\u2019s chief economist. Peterson added write-in responses for the survey \u201ccontinued to skew toward pessimism,\u201d as consumers referenced rising prices, especially for oil, gas and groceries, as well as increased health care costs.<\/p>\n
What To Watch For<\/p>\n
The Federal Reserve concludes its latest policymaking meeting on Jan. 28, though traders have priced in odds of just 2.8% of interest rates lowering from a range of 3.5% to 3.75%, according to CME\u2019s FedWatch tool<\/a>.<\/p>\n Key Background<\/p>\n Concerns about the labor market and inflation have persisted in recent months, with more Americans pointing to rising costs and declining finances. The University of Michigan\u2019s consumer sentiment report, which reflects Americans\u2019 views on personal finance and the cost of living, showed economic optimism rose to a five-month high in January, though it remained near a historic low. Joanne Hsu, director of the survey, said consumers reported \u201cpressure on their purchasing power\u201d stemming from higher prices and the \u201cprospect of weakening labor markets.\u201d <\/p>\n