United States consumer confidence declined for the second consecutive month in January, reflecting growing economic uncertainty among Americans.
The Conference Board consumer confidence index fell to 104.1, from 109.5 in December, below expectations of 105.6.
The index, which evaluates Americans’ perceptions of current economic conditions and their outlook for the next six months, revealed a significant drop in confidence regarding present conditions, down 9.7 points to 134.3.
Views on current labour market conditions fell for the first time since September, while short-term expectations for income, business, and jobs declined 2.6 points to 83.9.
According to the Conference Board, a reading below 80 may indicate a potential recession.
Despite these concerns, consumer spending remained strong through the holiday season. Retail sales rose 0.4% in December, buoying GDP growth to an annualised rate of 3.1% for the third quarter of 2024, driven by resilient consumer activity and increased exports.
However, rising credit card balances and delinquencies reported by the Federal Reserve Bank of Philadelphia suggest that consumer spending may be under strain. The share of respondents planning to purchase big-ticket items in the next six months declined slightly in the Conference Board’s latest survey.
Among other economic releases, the Census Bureau reported a sharp decline in durable goods orders for December.
Orders plunged 2.2% following a 2.0% drop in November, defying expectations of a 0.6% increase, driven by a 7.4% decline in transportation equipment orders, with non-defence aircraft and parts orders plummeting by 45.7%.
Excluding transportation, durable goods orders rose modestly by 0.3%, supported by a 1.2% increase in fabricated metal products.
Non-defence capital goods orders excluding aircraft - a key indicator of business investment - also climbed 0.5%, while shipments in this category rose 0.6%.
