Washington
\n \u00a0\u2014\u00a0<\/p>\n
\n America\u2019s economic mood deteriorated in January to its lowest level in more than a decade as consumers fretted about geopolitical tensions, affordability and President Donald Trump\u2019s unrelenting trade war.\n <\/p>\n
\n The Conference Board\u2019s Consumer Confidence Index for January, released Tuesday, declined 9.7 points to a reading of 84.5, the lowest since 2014, surpassing the lows of last year when Trump unveiled stiff tariffs and the depths of the pandemic recession in 2020.\n <\/p>\n
\n January\u2019s reading came in much lower than the 91.1 reading economists projected in a poll by data firm FactSet.\n <\/p>\n
\n The survey\u2019s indexes for how Americans feel about current economic conditions and their expectations for the US economy\u2019s future both fell sharply this month.\n <\/p>\n
\n \u201cAll five components of the Index deteriorated, driving the overall Index to its lowest level since May 2014 (82.2) \u2014 surpassing its Covid-19 pandemic depths,\u201d Dana Peterson, chief economist at The Conference Board, said in a release. \u201cReferences to prices and inflation, oil and gas prices, and food and grocery prices remained elevated.\u201d\n <\/p>\n
\n \u201cMentions of tariffs and trade, politics, and the labor market also rose in January, and references to health\/insurance and war edged higher,\u201d she added.\n <\/p>\n
\n Over the past month, the Trump administration has captured Venezuela\u2019s former leader; threatened massive tariffs on Canada and European countries; declared its intentions to purchase Greenland; and has continued to pile pressure onto the politically independent Federal Reserve.\n <\/p>\n
\n US consumers also remain frustrated with the country\u2019s higher cost of living these days, especially with employers hiring at a weak pace and people insured through the Affordable Care Act seeing their premiums skyrocket.\n <\/p>\n
\n \u201cAmericans are frustrated with rising prices for groceries and electricity, and they are fearful of the hiring recession that\u2019s underway right now,\u201d Heather Long, Navy Federal Credit Union\u2019s chief economist, said in commentary issued Tuesday. \u201cThe K-shaped economy is great for the top 20%, but many middle-class and moderate-income Americans are barely keeping up.\u201d\n <\/p>\n
What it means for economic growth and spending in early 2026<\/p>\n
\n In recent years, pessimism among Americans hasn\u2019t translated into weaker spending, which may remain the case this time around, especially with tax filers expected to receive bigger refunds.\n <\/p>\n
\n In the summer of 2022 as inflation reached a four-decade high and consumer confidence tanked, Americans continued to spend in the following months. The same was true last year, when Trump\u2019s tariffs caused Americans to sour on the economy.\n <\/p>\n
\n \u201cWhile spending held up through the holidays, the latest plunge in the survey readings flashes a warning sign for weaker activity over the first quarter of 2026,\u201d Ben Ayers, senior economist at Nationwide, said in an analyst note Tuesday. \u201cStill, we expect that larger tax refunds and additional fiscal stimulus will provide a shot in the arm for many households worried about a softening labor market and rising prices.\u201d\n <\/p>\n