January 2026 Consumer Sentiment Declines: Why does it matter?

(Illustrative Only)
Susanne realizes
that big purchases are out of
the question and she
needs to focus on the basics. 
Feeling a little uneasy
about spending money. 

Consumer spending surveys were released, and overall they point to weakening sentiment. One survey shows a sharp decline, while another shows only a modest uptick—an increase too small to signal meaningful improvement (check survey confidence rating). Taken together, the data suggest consumers are becoming less optimistic, and reduced optimism typically translates into fewer purchases and slower business growth. 

Since roughly 70% of GDP is driven by consumer spending, a downturn often indicates hesitancy to make major purchases and a shift toward cutting discretionary expenses. It’s also important to interpret these results alongside broader market factors such as hiring trends, layoffs, wages, inflation, and other economic indicators. Understanding consumer sentiment provides useful insight for short- and mid-term decision-making.

Conference Board January 2026 Consumer Sentiment Declines

• The Consumer Confidence Index (CCI) measures U.S. consumers’ optimism or pessimism about current economic conditions and future expectations. It is based on a monthly household survey and is widely watched as a leading indicator of consumer spending and economic momentum.

• In January 2026, the CCI fell sharply to its lowest level since 2014, dropping by 9.7 points to 84.5. Consumers reported weaker views of current business and labor conditions, along with declining expectations for the months ahead.

UoM Consumer Sentiment Report January 2026

• The Surveys of Consumers, conducted by the University of Michigan’s Survey Research Center, track how American households view current economic conditions and their expectations for the future. These measures help forecast consumer spending and saving behavior and are included in leading economic indicators used by government and business analysts.

• Monthly results include an Index of Consumer Sentiment along with sub-indexes for current conditions and future expectations. Recent January 2026 data show modest month-over-month improvements in sentiment, but sentiment remains significantly lower than a year ago, reflecting ongoing concerns about inflation, purchasing power, and labor market prospects.