Consumer confidence has sunk to its lowest level since 2014, signaling a significant deterioration in the country's views on the economy. Here is the latest on consumer confidence numbers.

Consumer Confidence Plunges to Lowest Level in Over a Decade

A new report released on Tuesday spells dire news for the economy. The Conference Board's Consumer Confidence Index for January fell 9.7 points, landing at a reading of 84.5. This is the lowest expressed confidence rating since 2014, eclipsing the lows of last year when President Donald Trump imposed tariffs. The January 2026 reading also surpassed the lows that were notched during the COVID-19 pandemic recession of 2020.

The January number was significantly lower than the 91.1 reading that economists had predicted through a poll by numbers guru FactSet. The report is meant to measure how Americans feel about the current state of the economy as well as their expectations for the future. Both of these indices plummeted in January.

According to Dana Peterson, chief economist at The Conference Board, all five components of the Index fell, sending the overall Index rating to its lowest level dating back to May of 2014. Peterson said in a press release that "References to prices and inflation, oil and gas prices, and food and grocery prices remained elevated.” In addition, she noted that more respondents referenced "tariffs and trade, politics, and the labor market" in their reasoning. References to health care, insurance, and the impacts of war also ticked up higher in January.

It has been a tumultuous start to the year on the international stage, likely contributing to the jitters that many Americans are feeling. Over the last several weeks, the White House has captured Venezuela’s former leader and brought him back to the U.S., declared its plans to purchase Greenland, increased the talk of tariffs on Canada and European countries, and gone after the politically independent Federal Reserve. This whiplash is playing out in how consumers feel about the domestic whiplash.

Financial experts are not surprised that all of the factors are contributing to a decrease in consumer confidence across the board. Rising costs of living paired with a weak job market are leading to discontent. Skyrocketing health care premiums for plans purchased through the Affordable Care Act (ACA) are only adding to the uncertainty. While the economy is still paying dividends to the top 20% of earners, many middle-class families are facing challenges trying to keep up with the increased prices.

How the Pessimism May Translate to Growth and Spending Going Forward

Decreased confidence does not always translate to weaker spending. Economists are expressing hope that this will be the case again, particularly given the expectation of higher tax refunds in 2026. This extra money in the pockets of many Americans could mute the impact of the decreased consumer confidence.

This was the situation in the summer of 2022 when inflation reached a 40-year high, sending consumer confidence into the ground. Americans continued to spend freely despite the worries. The same situation unfolded last year when the onset of the Trump administration tariffs caused Americans to become more skittish about the overall state of the economy.

Spending also remained robust over the holidays. However, economic forecasters are now expressing concern that the latest survey results should be read as a warning sign for the likelihood of weaker spending across the first quarter of 2026.

The biggest sliver of hope lies with the prediction of significantly larger tax refunds this year when compared to recent years. The U.S. Treasury Department projected that tax refunds will jump by an average of $1,000 this year per household. This additional stimulus will likely negate the concerns of a softening labor market and no end to the inflation train.

Unfortunately, the weak job market is forecast to persist this year. The problem is most dire for recent college graduates. According to a report from the Conference Board about the job market, over 55% of respondents expressed difficulties getting a job. This is the highest percentage since the pandemic. There are also concerns about career growth within the stagnating market.

The expectation of rising unemployment levels in the second quarter of 2026 will not do much to help consumer confidence numbers. As a result, retail sales are expected to suffer in the months ahead.

Not helping the economic situation is the revelation that the stock market in President Trump’s first year back in the Oval Office was the worst of any president’s first year of a new term since George W. Bush started his second term in 2005. Stocks closed the day Tuesday with mixed results. While the Dow finished the day 0.83%, the Nasdaq and S&P 500 closed with modest gains.

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