Americans' confidence in the U.S. economy falls sharply in January to lowest level since 2014

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WASHINGTON (AP) — U.S. consumer confidence declined sharply in January, hitting the lowest level since 2014 as Americans grow increasingly concerned about their financial prospects.

The Conference Board said Tuesday that its consumer confidence index cratered 9.7 points to 84.5 in January, falling below even the lowest readings during the COVID-19 pandemic.

A measure of Americans’ short-term expectations for their income, business conditions and the job market tumbled 9.5 points to 65.1, well below 80, the marker that can signal a recession ahead. It’s the 12th consecutive month that reading has come in under 80.

Consumers’ assessments of their current economic situation slid by 9.9 points to 113.7.

“Confidence collapsed in January, as consumer concerns about both the present situation and expectations for the future deepened,” said Dana Peterson, the Conference Board’s chief economist. ”All five components of the index deteriorated, driving the overall index to its lowest level since May 2014 — surpassing its COVID19 pandemic depths.”

Respondents’ references to inflation, including gas and grocery prices, remained elevated. Mentions of tariffs and trade, politics, and the labor market also rose in January as did comments about health insurance and war.

Perceptions of the job market also declined this month.

The conference board’s survey reported that 23.9% of consumers said jobs were “plentiful,” down from 27.5% in December. Also, 20.8% of consumers said jobs were “hard to get,” up from 19.1% the month previous.

The country’s labor market has been stuck in a “low hire, low fire” state, economists say, as businesses stand pat due to uncertainty over Trump’s tariffs and the lingering effects of elevated interest rates.

Earlier this month, the government reported that employers added just 50,000 jobs in December, nearly unchanged from 56,000 in November. The unemployment rate is 4.4%.

Job gains have been subdued all year, particularly after April’s “liberation day” tariff announcement by Trump. The economy gained just 584,000 jobs in 2025, sharply lower than that more than 2 million added in 2024.

“The dramatic drop on confidence is a direct result of the hiring recession,” said Heather Long, chief economist at Navy Federal Credit Union. “The fact that 2025 was the weakest year for job gains outside of a recession since 2003 is not going over well with the middle class.”

“This is a warning sign to policymakers that they need to focus on affordability and reviving hiring in 2026,” Long added.

The softening job market comes even as the U.S. economy keeps growing, often beyond projections.

Powered by strong consumer spending, the U.S. economy grew at the fastest pace in two years from July through September, according to the government’s latest estimate.