Consumer Confidence Slides in January

By Staff Writer January 29, 2025

The Conference Board Consumer Confidence Index declined by 5.4 points in January to 104.1 (1985=100). December’s reading was revised up by 4.8 points to 109.5 but was still down 3.3 points from the previous month. The Present Situation Index—based on consumers’ assessment of current business and labor market conditions—fell sharply in January, dropping 9.7 points to 134.3. The Expectations Index—based on consumers’ short-term outlook for income, business, and labor market conditions—fell 2.6 points to 83.9, but remained above the threshold of 80 that usually signals a recession ahead. The cutoff date for preliminary results was January 20, 2025.

“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,” said Dana M. Peterson, chief economist at The Conference Board.

By age group, January’s fall 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.

Peterson added: “Nonetheless, there were positive notes in other aspects of the survey. Consumers’ views of their Family’s Current Financial Situation were more positive, and six-month expectations for family finances reached a new series high. The proportion of consumers anticipating a recession over the next 12 months was stable near the series low. (These measures are not included in calculating the Consumer Confidence Index®.) Consumers also remained bullish about the stock market, even if a bit less so than at the end of 2024. Over half of consumers (52.9%) expected stock prices to increase over the year ahead, compared to just 23.7% who expected stock prices to decline.”

On a six-month moving average basis, purchasing plans for homes and cars were flat in January.

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Last modified on Wednesday, 05 February 2025 11:50