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Consumers are getting less optimistic about the future

Mitchell Hartman Jan 29, 2025

Consumers are turning more grumpy about the economy in the new year. There’d been pretty steady improvement in consumer sentiment through last summer and early fall, as inflation moderated and mortgage rates fell. 

But now, consumers are anticipating worse conditions to come. The Conference Board’s consumer confidence index fell sharply in January for a second month in a row

Stephanie Guichard, senior economist at The Conference Board, said consumers have become more worried about future unemployment. They also expect inflation to pick up in the coming year, after seeing some key prices rise recently. 

“What matters for them is how much they pay for their gas, for their eggs, their cars,” Guichard said.

Another thing that’s affecting consumer sentiment: a change of power in Washington

“There is this sort of switcheroo happening,” said Chris Jackson, senior vice president at polling firm Ipsos.

When political control shifts, consumers respond. “Democratic positive attitudes about the economy really collapsed the day after the election,” he said. “Republican positive attitudes are going up, but they’re not all the way to the point where Democrats’ were before the election.”

Jackson expects Republican sentiment to keep improving now that President Donald Trump is in office, pushing overall consumer sentiment higher in coming months. 

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