US Consumer Confidence Plunges to Lowest Level Since 2014
A survey released by the Conference Board on Tuesday, January 27, showed that US consumer sentiment in January hit its lowest level in nearly 12 years.
The headline consumer confidence index registered 84.5 for the month, well below the Dow Jones Industrial Average's forecast of 90.0.
After an upward revision to December's figure, the January reading represented a drop of 9.7 points, reaching its lowest point since May 2014.
Confidence Collapse
"Confidence collapsed in January as consumers' worries about the current situation and their expectations for the future deepened," said Conference Board chief economist Dana Peterson.
Current Situation and Expectations Indicators
The Current Situation Index fell 9.9 points to 113.7, while the Expectations Index, which measures short-term future prospects, dropped 9.5 points to 65.1, falling further below the 80-point mark considered a recession indicator.
Deteriorating Employment Conditions
The survey also showed a decline in the closely watched labor market conditions. The percentage of consumers who see jobs as "plenty of" fell to 23.9% from 27.5% in December, while the percentage who see jobs as "hard to come by" rose to 20.8% from 19.1%.
Economic Implications
This sharp decline in consumer confidence reflects increasing pressure on the US economy and raises concerns that weak future prospects could translate into a slowdown in consumer spending in the coming period.
