ICYMI: Tariff Uncertainty Drives Consumer Confidence to Decade Low

U.S. consumer confidence fell sharply in January to its lowest level since 2014 as Americans grew more pessimistic about the economy, jobs, and inflation. The Conference Board’s Consumer Confidence Index dropped 9.7 points to 84.5, falling below levels seen during the pandemic. Economists cited tariffs, slowing job growth, and rising household uncertainty as key drivers of the decline.

Since April, the Trump Administration has imposed across-the-board tariffs of 10%–50% on nearly all imports, with higher rates for dozens of countries and industries. The average effective tariff rate now stands at 16.8%, the highest since 1935.

●        AP: Americans’ confidence in the U.S. economy falls sharply in January to lowest level since 2014

The country’s labor market has been stuck in a “low hire, low fire” state, economists say, as businesses stand pat due to uncertainty over Trump’s tariffs and the lingering effects of elevated interest rates.

Job gains have been subdued all year, particularly after April’s “liberation day” tariff announcement by Trump. The economy gained just 584,000 jobs in 2025, sharply lower than that of more than 2 million added in 2024.

●        CNN: Consumer confidence collapses to lowest level since 2014

America’s economic mood deteriorated in January to its lowest level in more than a decade as consumers fretted about geopolitical tensions, affordability and President Donald Trump’s unrelenting trade war.

The Conference Board’s Consumer Confidence Index for January, released Tuesday, declined 9.7 points to a reading of 84.5, the lowest since 2014, surpassing the lows of last year when Trump unveiled stiff tariffs and the depths of the pandemic recession in 2020.

●        U.S. News & World Report: Consumer Confidence Falls to Lowest Level Since 2014

“Tariffs and trade policy effects have been muted by import frontloading, exemptions, and delayed price transmission,” Vanguard Senior Economist Josh Hirt added. “The pass-through of tariffs to prices will weigh moderately on growth and slow the pace of disinflation early in the year. We see core inflation peaking at just over 3% before moderating as the year progresses.”

●        Reuters: US consumer confidence deteriorates to a more than 11-1/2-year low

Homebuilding is being constrained by high material costs because of the tariffs, including on lumber, as well as high borrowing costs. There is also a shortage of labor that has been worsened by the immigration crackdown. Building lots are also scarce amid state and ‍local government regulations.

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