Americans’ confidence in US economy sinks to lowest level since 2014 despite Trump tariff claims

Americans are growing increasingly pessimistic about the US economy, despite Donald Trump’s claims that his tariff policies are injecting “trillions of dollars” into growth.

The sharp drop in consumer confidence has pushed the mood of US households below even the darkest days of the Covid pandemic, raising fresh concerns that the economy may be heading towards a recession.

Confidence falls to decade-low

Data released on Tuesday showed the Conference Board’s consumer confidence index fell to 84.5 in January 2026, down from 94.2 in December. This is the lowest reading since May 2014 and below all expectations in a Bloomberg survey of economists.

The index has now slipped beneath its lowest levels recorded during the 2020–21 pandemic period, underlining the scale of public anxiety.

Recession fears deepen

A key measure tracking Americans’ short-term expectations for income, business conditions and the job market dropped sharply by 9.5 points to 65.1. This is well below the 80 mark that typically signals an impending recession.

Notably, this expectations gauge has remained under 80 for 12 consecutive months, reinforcing fears that economic weakness may persist.

Consumers’ assessment of their current situation also worsened, falling 9.9 points to 113.7, suggesting unease about both present conditions and the future outlook.

Inflation and tariffs weigh on sentiment

“Confidence collapsed in January, as consumer concerns about both the present situation and expectations for the future deepened,” said Dana Peterson, chief economist at the Conference Board.

“All five components of the index deteriorated, pushing confidence to its lowest level since May 2014, even below its pandemic-era lows,” she added.

Survey responses pointed to growing worries over inflation, particularly fuel and grocery prices. Mentions of tariffs, trade, politics, the labour market, health insurance and war also rose sharply during the month.

Job market shows signs of strain

Confidence in the labour market weakened further. The proportion of consumers saying jobs were “plentiful” fell to 23.9 per cent in January from 27.5 per cent in December, while those saying jobs were “hard to get” rose to 20.8 per cent from 19.1 per cent.

Economists describe the labour market as being stuck in a “low hire, low fire” phase, with employers reluctant to expand amid uncertainty over Trump’s tariff agenda.

Government figures earlier this month showed employers added just 50,000 jobs in December, little changed from November. The unemployment rate currently stands at 4.4 percent.

Hiring slows despite economic growth

Overall job creation has slowed sharply. The US economy added about 584,000 jobs in 2025, far below the more than 2 million added in 2024, with hiring remaining subdued after Trump’s “liberation day” tariff announcement in April.

This erosion in confidence comes even as the US economy continues to grow in size. Strong consumer spending helped drive the fastest pace of economic growth in two years between July and September, according to the government’s latest estimate.

Still, the steep fall in confidence suggests Americans remain deeply uneasy about what lies ahead.