#USConsumerConfidence Recent data indicates a decline in U.S. consumer confidence. The University of Michigan's Consumer Sentiment Index decreased to 71.1 in January 2025 from 74.0 in December 2024, marking the first decline in six months. This drop is attributed to concerns about the labor market and potential price increases stemming from proposed tariffs on imports.

The decline in sentiment was widespread across various demographics, with 47% of consumers anticipating higher unemployment—the highest percentage since the pandemic recession. Additionally, one-year inflation expectations rose to 3.3% from December's 2.8%, surpassing the pre-pandemic range of 2.3%-3.0%. These heightened inflation concerns are linked to anticipated tariff policies.

Despite these concerns, U.S. consumers have demonstrated resilience. Retail sales during the 2024 holiday period reached $994 billion, a 4% increase from the previous year. Major U.S. banks reported increased earnings for the fourth quarter, driven by significant credit card expenditures. Analysts note that robust consumer activity has been crucial in driving economic growth.

Globally, consumer confidence has shown signs of improvement. Ipsos' Global Consumer Confidence Index rose by 0.7 points since last month, reaching 48.6. This increase reverses the previous month's losses, though the index remains 0.7 points lower than its reading from the same time last year. Notably, consumer confidence has declined in North America, with the U.S. experiencing a significant drop of 3.2 points.

Monitoring these trends is essential, as shifts in consumer confidence can influence spending patterns, which in turn affect economic growth.