NEW YORK, Jan. 27 (Xinhua) -- U.S. consumer confidence plunged in January to its lowest level in more than a decade, as U.S. people grew increasingly pessimistic about geopolitical tensions, high prices and the economic impact of trade policies, The Conference Board reported Tuesday.
According to preliminary results of a monthly survey issued by The Conference Board, the U.S. Consumer Confidence Index fell by 9.7 points from December to 84.5 in January, marking the lowest reading since May 2014 and surpassing the lows recorded during the depths of the COVID-19 pandemic in 2020.
"Confidence collapsed in January, as consumer concerns about both the present situation and expectations for the future deepened," said Dana Peterson, chief economist of The Conference Board. "All five components of the Index deteriorated."
The report highlighted that the Expectations Index, which measures consumers' short-term outlook for income, business and labor market conditions, dropped 9.5 points to 65.1, well below the threshold of 80 that historically signals a recession is ahead. The Present Situation Index also declined significantly, dropping 9.9 points to 113.7.
According to the survey, the deterioration in mood is driven by a combination of factors. Peterson noted that consumers' write-in responses skewed toward pessimism, with elevated references to inflation, specifically food and gas prices. Additionally, mentions of tariffs, trade policies, politics and war rose in January.
Perceptions of the labor market also showed signs of weakness. The labor market differential, which means the gap between those seeing jobs as "plentiful" versus "hard to get," continued to flag. "Expectations for business and labor market conditions six months from now fell further into negative territory," the report said.
The gloomy outlook is impacting spending plans. Consumers became more cautious about purchasing big-ticket items, with buying intentions for homes, furniture and appliances all retreating, it was reported. While plans to buy used cars climbed, expectations for purchasing new cars faltered.
