#USConsumerConfidence In recent months, U.S. consumer confidence has experienced fluctuations influenced by various economic factors. In December 2024, The Conference Board's Consumer Confidence Index declined by 8.1 points to 104.7, with the Present Situation Index slightly decreasing to 140.2 and the Expectations Index dropping to 81.1, nearing the threshold that often signals a potential recession.

In January 2025, the University of Michigan's Consumer Sentiment Index fell to 71.1 from December's 74.0, marking the first decline in six months. This decrease was attributed to concerns about the labor market and anticipated price increases due to proposed import tariffs. Notably, 47% of consumers expected higher unemployment, the highest percentage since the pandemic recession. Additionally, one-year inflation expectations rose to 3.3% from December's 2.8%, exceeding the pre-pandemic range of 2.3%-3.0%.

Despite these concerns, U.S. consumers have demonstrated resilience. During the 2024 holiday season, retail sales reached $994 billion, a 4% increase from the previous year. Major banks reported higher earnings in the fourth quarter, driven by increased credit card spending, particularly on products from retailers like Target and Costco. Consumers have been cautious and deliberate in their spending, focusing on essential purchases, even as credit card delinquency rates and interest rates remain high.

Looking ahead, consumer sentiment remains cautious entering 2025. Concerns persist about rising prices and potential new tariffs under President Donald Trump's administration, which could further impact costs. While the holiday season showed consumers' willingness to spend, it was primarily on discounted items, indicating ongoing conservative spending intentions.