Overview
- The Conference Board’s index dropped 9.7 points to 84.5, the weakest reading since 2014 and below economists’ forecasts.
- Both the Present Situation Index and the Expectations Index fell sharply to 113.7 and 65.1, respectively, with all five components weakening and the expectations gauge staying below the recession-risk threshold for a 12th month.
- Labor-market views deteriorated as the share saying jobs are plentiful slid to 23.9% and those saying jobs are hard to get rose to 20.8%, while plans for big-ticket purchases softened.
- The University of Michigan revised January sentiment up to 56.4, with year-ahead inflation expectations down to 4.0% and long-run expectations at 3.3%, underscoring divergent survey signals and differing survey timing.
- Despite gloomier sentiment, economists note spending remains relatively resilient, sustained largely by higher-income households, which complicates the outlook for a broader consumption slowdown.