WASHINGTON — U.S. consumer confidence dipped for the second consecutive month in January, a business research group said Tuesday.

The Conference Board reported that its consumer confidence index retreated this month to 104.1, from 109.5 in December. That is worse than the economist projections for a reading of 105.8.

December’s reading was revised up by 4.8 points but still represented a decline from November.

Measuring Consumer Sentiment

The consumer confidence index measures both Americans’ assessment of current economic conditions and their outlook for the next six months.

Consumers appeared increasingly confident heading into the end of 2024 and spending during the holiday season was resolute. In the face of higher borrowing costs, retail sales rose 0.4% in December and stores generally reported healthy sales during the winter holiday shopping season.

The board said that consumers’ view of current conditions tumbled 9.7 points to a reading of 134.3 in January and and views on current labor market conditions fell for the first time since September.

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Short-Term Expectations and Recession Concerns

The measure of Americans’ short-term expectations for income, business and the job market fell 2.6 points to 83.9. The Conference Board says a reading under 80 can signal a potential recession in the near future.

However, the proportion of consumers expecting a recession over the next 12 months remained stable at the low end of the series range.

Though the board’s index has declined the past two months, consumers continue to spend, helping to prop up the U.S. economy since the sharp rebound from the COVID-19 recession in the spring of 2020.

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Economic Growth and Consumer Spending

In December, the government said that the U.S. economy grew at a healthy 3.1% annual clip from July through September, propelled by vigorous consumer spending and an uptick in exports. GDP growth has topped 2% in eight of the last nine quarters.

All of that spending could be catching up to consumers. The Federal Reserve Bank of Philadelphia reported last week that credit card balances and delinquencies are on the rise and that active cardholders making the minimum payment is at a 12-year high.

The share of respondents to the Conference Board’s latest survey who said they plan to purchase “big-ticket” items in the next six months was down slightly from its December report.

Consumer spending accounts for about two-thirds of U.S. economic activity and is closely watched by economists for signs how the American consumer is feeling.