The University of Michigan's Consumer Sentiment Index rose "modestly" in January but remains 21% below year-ago levels amid inflation and job market concerns.
Sentiment up month-over-month but down year-over-year: The Index of Consumer Sentiment for January came in at 56.4, up 3.5 points from December but 21% below last year's level of 71.7, beating economist forecasts of 54.
Inflation expectations ease slightly: Year-ahead inflation forecasts fell to 4% from 4.2%.
Labor market outlook remains weak: Consumers see minor improvements in labor market expectations, "but just a touch," adding "they don't think we're out of the woods."
Tariff volatility could dampen sentiment: While short-lived tariff discussions won't impact consumer outlook, sustained trade war escalation similar to last April and May would "certainly weigh on consumers" who have only gradually eased worries about tariffs.
Read more via Yahoo Finance
What are CEOs most worried about when it comes to the economy? According to a new Conference Board survey, "uncertainty is their biggest economic worry for 2026."
36% of CEOs globally pointed to a "downturn/recession" as the "top economic threat for 2026."
The top economic threat among U.S. CEOs was uncertainty, at 43%.
The top geopolitical threat, cited by 47% of CEOs globally and by 54% of U.S. CEOs, was cyberattacks.
46% of U.S. CEOs globally listed their top AI-related priority as measuring the technology's return on investment. (That's compared to one-third of CEOs globally.)
U.S. CEOs are feeling the "most pessimistic" about AI's potential to disrupt business. 38% of U.S. CEOs believe "AI will have a negative impact on their companies in 2026."
More than a quarter (27%) of U.S. CEOs said workers' “expectations of higher compensation” are a "key hiring challenge," significantly more than CEOs in Asia (19%) and Europe (15%).
Read more via The Conference Board
Economists surveyed by The Wall Street Journal are feeling more optimistic about GDP growth. They also expect things to begin to look up when it comes to the U.S. labor market.
In mid-2025, just after the Trump administration announced import tariffs, economists surveyed by The Wall Street Journal "slashed their forecasts for economic growth in 2025 from over 2% to a measly 0.8%, measured from the fourth quarter of the prior year."
Now, those same economists "expect gross domestic product, adjusted for inflation, grew 2.3% in 2025."
In April 2025, those economists said they anticipated 1.8% GDP growth for 2026. Now, they are expressing increased optimism, with their "average forecast … now back to 2.2%."
What's behind the increased optimism? High-income households are spending money. Unemployment remains low and minimum wage increases across nineteen states could boost spending by lower income households.
Economists also "think the worst has passed" when it comes to the labor market.
Economists surveyed by the Journal expect the unemployment rate to "hover around 4.5% in 2026" and they anticipate “monthly job growth over the next four quarters at 65,000, up from 49,000 in the prior survey.”
Read more via The Wall Street Journal
The amount of money U.S. workers believe they will need in order to retire has increased significantly, according to a new report by Betterment.
Highlights from Betterment's survey of 1,000 full-time employees:
90% of respondents are experiencing financial anxiety, up from just 71% in 2022.
65% of respondents named inflation as a "top stressor," while 40% cited credit card debt and 31% cited housing costs.
54% of surveyed workers said "student debt contributes significantly to their financial anxiety."
48% of U.S. workers "believe they'll need at least $1 million" in order to "retire comfortably." That's up from 37% who believed the same in 2024.
Just 27% of surveyed workers believe they will actually achieve $1 million in retirement savings.
Despite the heightened financial anxiety, 71% of surveyed workers are "at least somewhat confident they'll be able to retire comfortably."
Gen Z workers are more optimistic than their Gen X peers, and men are more confident than women.
Women and older workers are "more likely to consider delaying retirement."
58% of women "have considered delaying retirement," compared to just 48% of men.
Read more via Betterment
Texas Attorney General Ken Paxton recently published legal guidance “declaring many diversity, equity, and inclusion programs in public and private spaces unconstitutional.” Experts say the guidance could be a sign that state lawmakers will push to "phase out diversity programs" within the private sector.
On January 19, Texas Attorney General Ken Paxton issued a "lengthy formal opinion" on diversity, equity and inclusion practices, saying that many DEI policies in the public and private sectors "raise serious constitutional and statutory concerns."
According to the published opinion, the state's “historically underutilized business” (HUB) framework is "presumptively discriminatory and fails strict scrutiny under the U.S. Equal Protection Clause and the Texas Equal Rights Amendment."
DEI policies and programs that have been "memorialized in over 100 woke state laws" are "unconstitutional," according to the published opinion, "including DEI programs in schools and state and local governments across Texas."
The opinion states that private companies engaging "woke DEI practices" are "exposing themselves to significant legal liability under state and federal law."
The opinion makes particular note of "demographic hiring targets, diversity mandates for boards, and pipelines such as internships and fellowships that are open only to certain demographic groups or where race or sex is treated as a plus factor."
Experts say employers that "operate in Texas or deal with Texas public entities" should view the opinion as a "straightforward" signal that the state intends to mount legal challenges.
Read more via Texas Attorney General, HCA Mag, NBCDFW
Canada: The Canadian economy added only "8,200 net new jobs" in December, following "three months of outsize gains." Canada's unemployment rate increased from 6.5% to 6.8%. (Reuters)
New Zealand: Almost half (44%) of New Zealand employers are primarily relying on salary guides when they go about "setting pay for common job roles," according to newly published research from Robert Half. (SIA)
United Kingdom: The number of employed people declined by 43,000 in December, the "biggest monthly drop since November 2020." The retail, restaurant and hotel sectors were hit hardest by the decline. Unemployment held at 5.1%. (The Guardian)
