January Consumer Sentiment Remains Weak Even as Economic Data Holds

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The University of Michigan's Index of Consumer Sentiment rose modestly to 56.4 in the final January reading, up from 52.9 in December, with gains recorded across demographic groups. Even so, sentiment remains more than 20% below year-ago levels. Meanwhile, The Conference Board's Consumer Confidence Index fell sharply to 84.5 in January, down from 94.2 the prior month, marking its lowest level since May 2014. Despite the surveys moving in different directions month to month, both point to a cautious consumer mindset entering the new year.

The pullback in confidence was broad-based. The Conference Board's Present Situation Index declined 9.9 points to 113.7, while the Expectations Index fell 9.5 points to 65.1. Consumers continued to cite prices and inflation as their top concerns, alongside rising mentions of tariffs and trade, politics and the labor market. Notably, respondents reported growing hesitation around major purchases, with spending plans for both big-ticket items and services weakening over the next six months.

This caution persists even as underlying economic conditions remain relatively stable. Job growth has moderated but remains positive, keeping unemployment near historically low levels and supporting household income. Wage gains have generally outpaced inflation, helping stabilize purchasing power after several years of erosion. Rising equity markets and firmer home values have also rebuilt household wealth for many families.

The Federal Reserve reinforced that assessment at its Jan. 28 meeting, holding its benchmark policy rate steady at 3.5% to 3.75 percent, the first pause since July 2025. Policymakers cited a stabilizing labor market and solid economic backdrop. Still, consumer sentiment remains stuck near levels typically associated with economic downturns, suggesting that elevated prices, borrowing costs and ongoing uncertainty continue to weigh more heavily on household psychology than improving fundamentals.

NMMA will continue tracking consumer sentiment and its impact on the industry. Members are encouraged to leverage tools such as the Monthly Industry Data Summary and Marine Leadership Barometer to support planning and navigate evolving market dynamics.

For more economic updates and data-driven insights, visit nmma.org/statistics or contact the NMMA Business Intelligence team at [email protected].

This piece is a result of analysis by NMMA and Dr. Shawn Dubravac, on behalf of NMMA.