#USConsumerConfidence #USConsumerConfidence In January 2025, U.S. consumer confidence experienced a decline, marking the first decrease in six months. The University of Michigan's Consumer Sentiment Index fell to 71.1 from December's 74.0, with concerns about the labor market and potential price increases due to proposed tariffs by President Donald Trump's administration contributing to this downturn.

Inflation expectations have also risen, with one-year projections increasing to 3.3% from December's 2.8%, reaching the highest level since May. Long-term expectations climbed to 3.3%, a peak not seen since June 2008. These shifts reflect consumer apprehensions about the potential impact of new tariffs on import prices.

Despite these concerns, consumer spending remained robust during the 2024 holiday season, with retail sales reaching $994 billion, a 4% increase from the previous year. Major U.S. banks reported higher earnings in the fourth quarter, driven by increased credit card expenditures. However, consumers are approaching 2025 with caution, mindful of rising prices and the potential effects of incoming tariffs.

The Conference Board's Consumer Confidence Index also reported a decline in December, dropping to 104.7 from November's 112.8. This decrease was attributed to a more pessimistic outlook on income, business, and labor market conditions.