US Consumer Confidence Index Declines for Second Consecutive Month in January

On Tuesday, The Conference Board, a non-partisan, not-for-profit think tank founded in 1916, released the results of its Consumer Confidence Survey for January.

• The Consumer Confidence Index (CCI) declined 5.4 points to a reading of 104.1 in January (1985=100). December’s reading was revised up by 4.8 points to a reading of 109.5 but was still down 3.3 points from November.
• The Present Situation Index—based on consumers’ assessment of current business and labor market conditions—fell sharply in January, dropping 9.7 points to a reading of 134.3.
• The Expectations Index—based on consumers’ short-term outlook for income, business, and labor market conditions—fell 2.6 points to a reading of 83.9 in January, but remained above the threshold of 80 that usually signals a recession ahead.

Among age groups, January’s decline in confidence was led by consumers under 55 years old. Consumers aged 55+ saw a small uptick in confidence. By income group, the sharpest decline in confidence was seen in households earning over $125K, while consumers at the bottom of the income range reported the strongest gains. The confidence gap between the top income groups and those making between $75K and $100K narrowed.

The cutoff for the preliminary results was January 20.

In a statement accompanying the report, Dana Peterson, Chief Economist at The Conference Board, said:

“Consumer confidence has been moving sideways in a relatively stable, narrow range since 2022. January was no exception. The Index weakened for a second straight month, but still remained in that range, even if in the lower part. All five components of the Index deteriorated but consumers’ assessments of the present situation experienced the largest decline. Notably, views of current labor market conditions fell for the first time since September, while assessments of business conditions weakened for the second month in a row. Meanwhile, consumers were also less optimistic about future business conditions and, to a lesser extent, income. The return of pessimism about future employment prospects seen in December was confirmed in January.”