The conference board gave a picture of how Americans are feeling about the economy for early January 2026. Confidence collapsed.
Consumer confidence index fell to 84.5 from 94.2 (a normal economy falls around a score of 100).
Present vs future:
Present situation index dropped to 113.7 (this is how people view current conditions) fewer are feeling good with both weakening
Expectations index fell to 65.1 (this looks at the next 6 months. Below 80 signals higher risk of recession.)
All age groups, income groups, and political affiliations saw declines in optimism. This is due to inflation, tariffs, politics, labor market concerns, insurance costs, and geopolitics. Less people are expecting rate cuts from the Fed. Consumers are declining big ticket purchases (except for smartphones)
Consumer spending accounts for 2/3 of GDP so when confidence drops we see that shift in behavior fast. This year will be a cautious year.