C-Suite Perspectives The State of the Economy for January 2026
Jan 27, 2026
Dana M. Peterson, Chief Economist at The Conference Board, gives a crisp, data-driven take on the January collapse in consumer confidence. She walks through slipping business and labor assessments, rising price concerns, shifts in buying plans, and how tariffs and trade frictions are reshaping imports and exports. Short, timely, and grounded in the latest data.
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Confidence Has Been Falling Since Mid‑2025
- Consumer confidence has trended downward since July 2025 and dropped sharply in January 2026.
- The January decline reversed a December uptick and continues a multi-month weakening in sentiment.
Labor Market Fears Drive Pessimism
- Consumers reported the present situation and short‑term outlook worsened, with the labor market dropping more than business conditions.
- Expectations for incomes and labor market prospects six months ahead also weakened in January.
Mixed Inflation Expectations Signal Outliers
- Twelve‑month average inflation expectations rose while the median fell, showing outliers push the mean higher.
- Overall inflation expectations remain elevated versus 2024 levels after tariffs entered the picture.