California Consumer Confidence Collapses to 5-Year Low

California consumer confidence has plummeted to its lowest level in five years as residents grow increasingly pessimistic about the economy. According to a report by The Conference Board published in January 2026, confidence in the state dropped 28% compared to the previous month. This sharp decline, recently reported by the LA Daily News, marks a sudden reversal of the upward trend seen in November and December 2025.

The long-term data reveals an even steeper downward trajectory. California consumer confidence is now 25% lower than it was in January 2025, when President Donald Trump began his second term. The current index represents the lowest point since December 2020, a period when the COVID-19 pandemic was actively disrupting the global economy. Furthermore, the latest figures are 22% below the historical average recorded since 2007.

Because consumer spending accounts for approximately two-thirds of all economic activity, this surge in pessimism is a critical indicator. Experts warn that low confidence often leads households to delay major purchases, such as homes or vehicles.

The drop in sentiment follows persistent high inflation and growing fears that job growth in California is slowing down. The state’s economic structure, which is heavily geared toward global business, is also facing friction with the Trump administration’s inward-looking economic policies. Additionally, conservative residents have expressed ongoing dissatisfaction with how the state government is managing the local economy.

Specific metrics within the report highlight the severity of the slump:

• The Present Situation Index dropped 32% in January 2026 and is 31% lower than January 2025, hitting its lowest mark since January 2021.

• The Expectations Index fell 24% over the month and 20% over the year, reflecting the dimmest outlook since April 2025.

Consumer sentiment is weakening across the United States as well. The national confidence index fell 10% in January 2026 and has decreased 20% during the first year of the second Trump term, reaching its lowest level since May 2014.

However, the trend varies by state. While Texas, New York, and Ohio experienced declines similar to California, optimism actually improved in Pennsylvania and Illinois. Experts cautioned that the rapid cooling of consumer sentiment will likely lead to a slowdown in the real economy, creating a significant burden for the California economic landscape.

BY EUNYOUNG LEE [lee.eunyoung6@koreadaily.com]