Conference Board: Consumer Confidence Plummets in January
Consumer sentiment, also known as consumer confidence, measures how U.S. consumers feel about the economy, wages, jobs and their personal finances.
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Senior Editor & Content Strategist Updated on Jan. 27.
Conference Board: Confidence declines in January
The Conference Board’s Consumer Confidence Index report for January (released on Jan. 27) went down by 9.7 points to 84.5 from an upwardly revised index of 94.2 in December.
Both the Present Situation Index and the Expectations Index also fell.
Here’s what NerdWallet’s senior economist Elizabeth Renter had to say about the report:
It may be no surprise that consumers feel bad about the economy, but the magnitude of those feelings is certainly remarkable. What’s particularly interesting about this month’s decline in sentiment is that there is no one single event or news moment driving the drop — it’s a little bit of all of the things. Consumers are being bombarded with information about dramatic economic policies, Central Bank independence, changes in global relations, domestic turmoil and a chill in the labor market.
The labor market is likely playing an outsized role in the worsening sentiment. There’s generally a certain amount of reassurance about economic turmoil when you know your job is secure or you can find another if needed. Right now, that isn’t the case. People feel stuck in their current jobs and not confident they could get a different one. Macroeconomic uncertainty can feel a lot more dangerous when your household finances don’t feel secure.
More findings from the Conference Board
The Conference Board’s Consumer Confidence Index went down 9.7 points in January to 84.5, the latest report released on Jan. 27 shows.
The board’s Present Situation Index — measuring consumers’ current assessment of business and labor market conditions — declined by 9.9 points to 113.7.
The Expectations Index — measuring consumers’ short-term outlook for income, business and labor market conditions — fell by 9.4 points to 65.1. The same index was at 54.4 in April, the lowest level in nearly 14 years.
University of Michigan: Index up in January
The University of Michigan’s Index of Consumer Sentiment rose in January, according to the final results for the month released on Jan. 23.
Joanne Hsu, who directs consumer surveys at the University of Michigan, said in the release that the increase was small, but wide-ranging by key demographic characteristics – age, income, educational attainment and political affiliation. But stepping back, the bigger picture sentiment is still pessimistic.
“National sentiment remains more than 20% below a year ago, as consumers continue to report pressures on their purchasing power stemming from high prices and the prospect of weakening labor markets,” said Hsu. “Aside from tariff policy, consumers do not appear to be connecting foreign developments to their views of the economy.”
More findings from the University of Michigan
The university’s Index of Current Economic Conditions registered at 56.4 in January, compared to December’s reading of 52.9, according to the survey released on Jan. 23. Current Economic Conditions rose to 55.4 for January, compared to 50.4 for December. The Index of Consumer Expectations registered at 57 for January, up slightly from 54.6 for December and 7 points above the record low of 50 set in June 2022.
New York Fed: Labor market expectations drop
The New York Fed’s Survey of Consumer Expectations for December, released on Jan. 8, shows consumers are pessimistic about their job prospects. The mean perceived probability of finding a job in the event of job loss fell by 4.2 percentage points to 43.1% — a series low. Job loss expectations also increased. Here’s what NerdWallet’s senior economist Elizabeth Renter had to say about the report:
It’s hard to feel good about your household’s financial future when you don’t feel secure about your ability to earn more money, find a better job or keep the one you have. One impact of the current, cooler labor market is a souring in overall consumer economic sentiment. Even if you have a job, there’s a good chance you feel a little stuck in it, as employers aren’t hiring much and wage growth has slowed.
Consumers are assigning a higher likelihood of missing a debt payment in the near future, which could indicate increasing household fragility. Households that relied on debt such as credit cards and BNPL for holiday spending may be starting their new year with a bit of regret. When your debt payments rise, you have less wiggle room in the budget for unexpected bills or worse — income loss.
More findings below.
What is consumer sentiment?
Consumer sentiment, also known as consumer confidence, is an index of how U.S. consumers are feeling about the current and future state of the economy, and all that folds into the economy: the job market, wages, business conditions and their personal finances. It’s a valuable tool for economists, as consumer sentiment can be used as an early predictor of economic changes.
How people feel about the economy can directly impact the economy, because consumers' attitudes often affect how much they spend on things like food, transportation, household goods, entertainment and more.
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In 2023, consumers’ personal spending made up 67.9% of the U.S. GDP, or gross domestic product, according to the Federal Reserve Bank of St. Louis. That’s a significant majority of the nation’s GDP, so keeping a close eye on consumer sentiment is key in foreseeing potential economic slumps or rallies.
When the economy is in a recession, consumer sentiment falls. On the flip side, when the economy is expanding, consumer sentiment rises. The index does typically peak before a recession, though.
Unlike other indexes, such as the Consumer Price Index (CPI), consumer sentiment isn’t calculated using spending data or hard figures. Instead, economists rely on two major surveys of consumer confidence: The University of Michigan’s Surveys of Consumers and the Conference Board’s Consumer Confidence Survey.
Each survey collects the general attitudes and opinions of hundreds of U.S. consumers. Then, those opinions are assigned numeric values and aggregated into one number, or index.
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What is consumer sentiment like right now?
The University of Michigan’s Index of Consumer Sentiment
The final reading for January from the University of Michigan, released on Jan. 23, shows:
- The Index of Consumer Sentiment registered at 56.4 for January, up from 52.9 for December.
- Current Economic Conditions registered at 55.4 for January, up from 50.4 for December.
- The Index of Consumer Expectations registered at 57 for January, up from 54.6 for December.
How the University of Michigan creates its index
The Index of Consumer Sentiment is one of three indexes derived from the University of Michigan’s Surveys of Consumers, which started in 1946. Originally conducted annually, the surveys switched to a monthly cadence in 1978. The surveys have a sample size of roughly 600 people selected randomly from the 48 adjoining U.S. states and the District of Columbia.
The surveys include roughly 50 questions covering personal finances, business conditions and buying conditions. From those surveyed, three indexes are produced: the Index of Consumer Sentiment, the Index of Consumer Expectations and the Index of Current Economic Conditions.
The Index of Consumer Sentiment is the most commonly cited index of the bunch. It’s derived from these five questions:
- "We are interested in how people are getting along financially these days. Would you say that you (and your family living there) are better off or worse off financially than you were a year ago?"
- "Now, looking ahead: Do you think that a year from now you (and your family living there) will be better off financially, or worse off, or just about the same as now?"
- "Now, turning to business conditions in the country as a whole. Do you think that during the next twelve months we'll have good times financially, or bad times, or what?"
- "Looking ahead, which would you say is more likely: that in the country as a whole we'll have continuous good times during the next five years or so, or that we will have periods of widespread unemployment or depression, or what?"
- "About the big things people buy for their homes, such as furniture, a refrigerator, stove, television, and things like that. Generally speaking, do you think now is a good or bad time for people to buy major household items?"
Historically, the surveys have been conducted by phone. Starting in July 2024, they'll be conducted online, with researchers aiming for 900 to 1,000 respondents.
The Conference Board’s Consumer Confidence Index
Conference Board data for January, released on Jan. 27 shows:
- The Conference Board’s Consumer Confidence Index fell 9.7 points to 84.5.
- The Present Situation Index went down by 9.9 points to 113.7.
- The Expectations Index fell by 9.5 points to 65.1.
How the Conference Board’s Consumer Confidence Index comes together
The Conference Board’s Consumer Confidence Survey was launched in 1967 as a mail survey conducted every other month. Today, the survey is conducted online, on a monthly basis, with a sample size of roughly 3,000 respondents.
The Conference Board issues a five-question survey to calculate three distinct indexes: the Consumer Confidence Index, the Present Situation Index and the Expectations Index. Once the surveys have been completed, each question is given a relative value. Then, those values are compared against their relative values from 1985 — the survey’s benchmark year, with an index set at 100.
The Consumer Confidence Index is the average index for all five questions. The Present Situation Index is calculated using the average indexes for the first two questions, and the remaining three questions determine the Expectations Index.
Present Situation Index
- Respondents’ appraisal of current business conditions.
- Respondents’ appraisal of current employment conditions.
Expectations Index
- Respondents’ expectations regarding business conditions six months hence.
- Respondents’ expectations regarding employment conditions six months hence.
- Respondents’ expectations regarding their total family income six months hence.
Consumer Confidence Index
This is the average index for all five questions above.
The Federal Reserve Bank of New York’s Survey of Consumer Expectations
Some highlights for December 2025 from the Federal Reserve Bank of New York's Survey of Consumer Expectations released on Jan. 8 shows:
- Inflation. Median inflation expectations rose by 0.2 percentage point to 3.4% at the one-year-ahead horizon and were unchanged at 3.0% for both the three-year horizon and five-year horizon.
- Commodity prices. Year-ahead price expectations fell for gas (down 0.1 percentage point to 4%), food (down 0.2 percentage point to 5.7%), medical care (down 0.2 percentage point to 9.9%), college education (down 0.1 percentage point to 8.3%) and rent (down 0.6 percentage point to 7.7%).
- Home price growth. Median year-ahead home price growth expectations were unchanged at 3% for the seventh month in a row. Since August 2023, the range has moved between 3% and 3.3%.
- Earnings expectations. Median one-year-ahead expectations for earnings growth went down by 0.1 percentage point to 2.5%.
- Unemployment expectations. The mean probability that the unemployment rate will increase a year from now fell by 0.3 percentage point to 41.8%.
- Probability of job loss. The mean expectation of job loss over the next 12 months rose by 1.4 percentage points to 15.2%.
- Probability of quitting. The mean expectation of quitting a job over the next 12 months went down by 0.2 percentage point to 17.5%.
- Probability of finding a job if job loss occurs. The mean perceived probability of finding a job over the next 12 months went down by 4.2 percentage points to a new series low of 43.1%.
- Household income growth. The median expectation of household income growth rose by 0.1 percentage point to 3%.
- Household spending growth. Households expect to spend 4.9% more over the next year, a 0.1 percentage point decline.
- Credit access. Perceptions of credit access declined compared to a year ago, with a bigger share of households saying it is harder to get credit and a smaller share reporting it is easier to get credit.
- Delinquency expectations. The average perceived probability of missing a minimum debt payment over the next three months rose by 1.6 percentage points to 15.3% — the highest reading since April 2020.
How the Federal Reserve Bank of New York conducts its survey
The Federal Reserve Bank of New York’s Survey of Consumer Expectations focuses on expectations about economic outcomes.
The survey, which is conducted by NielsenIQ, launched in 2013. It’s an internet-based survey that asks a rotating panel of 1,300 heads-of-household about their expectations of the economy, as well as their own personal finances related to the following categories:
Inflation:
- Inflation expectations.
- Inflation uncertainty.
- Probability of different inflation outcomes.
- Home price change expectations.
- Home price change uncertainty.
- Commodity price change expectations.
Labor market:
- Earnings growth expectations.
- Earnings growth uncertainty.
- Job separation expectations.
- Job finding expectations.
- Moving expectations.
- Expectations of higher unemployment.
Household finance:
- Household income growth expectations. Household spending growth expectations. Change in taxes. Change in credit availability. Debt delinquency expectations. Expectations of higher interest rate on savings accounts. Household financial situation.Expectations of higher stock prices. Government debt growth expectations.
When do the next consumer sentiment reports come out?
The University of Michigan’s next set of results for its Surveys of Consumers will be released on Friday, Feb. 6.
The Conference Board will release its next Consumer Confidence Survey on Tuesday, Feb. 24.
The New York Fed will release its next Survey of Consumer Expectations on Monday, Feb. 9.
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