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

U.S. consumer confidence plummeted to its lowest level since 2014 in January, reflecting growing anxiety among Americans about their financial futures despite continued economic growth.

The Conference Board reported Tuesday that its consumer confidence index fell 9.7 points to 84.5 in January, dropping below even the lowest readings recorded during the COVID-19 pandemic. This dramatic decline signals potential trouble ahead for the economy.

“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 COVID-19 pandemic depths.”

The index measuring Americans’ short-term expectations for income, business conditions, and employment opportunities tumbled 9.5 points to 65.1, marking the 12th consecutive month this reading has fallen below 80 — a threshold that often signals an impending recession. Concurrently, consumers’ assessment of current economic conditions declined by 9.9 points to 113.7.

Survey respondents expressed heightened concerns about inflation, particularly regarding gas and grocery prices. Mentions of tariffs, trade policies, politics, the labor market, health insurance, and international conflicts also increased in January, reflecting a multifaceted set of economic anxieties.

The labor market, long considered a bright spot in the economy, is showing significant signs of cooling. According to the Conference Board’s survey, only 23.9% of consumers described jobs as “plentiful,” down from 27.5% in December. Meanwhile, 20.8% reported jobs were “hard to get,” up from 19.1% the previous month.

Recent government data supports these perceptions. Employers added just 50,000 jobs in December, barely up from 56,000 in November, with the unemployment rate standing at 4.4%. The economy gained only 584,000 jobs in 2025, a sharp decline from the more than 2 million jobs added in 2024.

Economic experts attribute much of this slowdown to policy uncertainty and lingering effects of high interest rates. “The dramatic drop in 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.”

The labor market’s weakness appears particularly concerning given that it coincides with continued economic expansion. The U.S. economy actually grew at its fastest pace in two years during the July-September quarter, powered largely by robust consumer spending.

Economists describe the current situation as a “low hire, low fire” state, where businesses are reluctant to expand their workforce due to uncertainty surrounding trade policies, particularly following the “liberation day” tariff announcement by the Trump administration in April. This cautious approach by employers has resulted in stagnating job growth even as companies avoid large-scale layoffs.

Long emphasized the implications for policymakers, stating, “This is a warning sign to policymakers that they need to focus on affordability and reviving hiring in 2026.”

The disconnect between overall economic growth and declining consumer confidence presents a complex challenge for economic policymakers. While GDP figures suggest a healthy economy, the deteriorating consumer outlook and slowing labor market could potentially undermine future growth if not addressed.

As 2026 approaches, stakeholders will be watching closely to see whether these warning signs translate into broader economic weakness or if targeted policy interventions can help restore confidence and reinvigorate the job market while maintaining economic momentum.