When People Stop Believing, the Economy Slips on Black Ice
What happens when 330 million consumers hit the brakes
You don’t need a recession to break an economy.
You just need people to lose confidence.
That’s what’s happening in the U.S. right now… and the numbers are flashing yellow, not green.
In January, U.S. consumer confidence fell to 84.5, the lowest level in nearly a decade. Worse?
It’s lower than during COVID lockdowns. That’s not a blip. That’s a mood shift.
Think of an economy like winter driving. As long as drivers trust the road, traffic keeps moving. But once everyone suspects black ice ahead, nobody slams the gas… even if the road still looks clear.
That’s where America is.
Why This One Number Actually Matters
Consumer spending makes up roughly 70% of U.S. economic activity. When people feel unsure, they don’t splurge, upgrade, or take risks. They delay. They downshift. They hold cash.
And hesitation spreads faster than confidence ever does.
The confidence index has two parts…
How things feel right now
How people expect things to look six months from now
The second one… expectations… fell to 65.1.
Here’s the key detail most headlines bury:
When that expectations number drops below 80, a recession usually follows within about 12 months.
65 isn’t flirting with the line.
It’s already across the street ordering drinks.
This Isn’t Left vs Right… It’s Everyone
This drop didn’t pick sides.
Confidence fell across…
Every age group
Every income bracket
Every political stripe
Independents slid the hardest, but nobody was spared.
That tells you something important… this isn’t partisan whining. It’s structural unease.
People are worried about the same things…
Food and grocery prices
Gas and energy costs
Trade chaos and tariffs
Job stability
Different voters. Same anxiety.
The Job Market Looks Fine… Until You Look Closer
Official unemployment numbers don’t tell the full story anymore.
Only 23.9% of Americans say jobs are plentiful… down sharply from last month. Meanwhile, more people say jobs are hard to get.
For context, during genuinely strong years (2018–2019), nearly half of Americans said jobs were plentiful.
Today’s labour market feels like this…
You still have a chair… but the music sounds like it’s about to stop.
Job growth in 2025 was the weakest since 2020. Hiring slowed noticeably after tariff announcements last spring. Companies aren’t firing aggressively… but they’re not hiring either.
That traps people.
You keep your job, but you don’t dare move.
That kind of fear freezes spending.
“I’m Okay Today. I’m Scared About Tomorrow.”
That sentence basically summarizes the data.
Households say their current situation is fine.
Their future outlook? Worse.
That gap matters. When people fear what’s ahead, they behave defensively… even before anything officially breaks.
This is how slow-motion downturns start.
Inflation Expectations Are Slipping Their Leash
Another red flag: people don’t believe inflation is done.
Many now expect prices to keep rising at 4–6%, not drifting back to the Fed’s old 2% comfort zone.
Once people stop trusting price stability, it becomes self-fulfilling…
Workers demand higher pay
Businesses raise prices
Expectations turn into reality
That puts the central bank in a box.
Cut rates to help jobs? You risk inflation.
Hold rates to fight inflation? You weaken employment.
That’s the classic stagflation trap… and it hasn’t looked this familiar since the 1970s.
Big Purchases Are Being Postponed… Everywhere
This is where the slowdown becomes visible.
Fewer people say “yes” to…
New cars (used cars are rising instead)
Homes
Appliances
Furniture
Electronics
More people say “maybe” or flat-out “no.”
Translation… Americans aren’t upgrading. They’re maintaining. That’s survival mode, not growth mode.
Businesses notice.
They pause expansion.
They stop hiring.
The freeze feeds on itself.
Belief Becomes Behaviour… Behaviour Becomes Reality
More Americans now say a recession is likely… or already here.
In economics, belief isn’t just opinion. It’s action.
When people expect trouble, they…
Spend less
Save more
Delay everything optional
That behaviour creates the slowdown they fear.
No shock required. No crash needed. Just collective hesitation.
The Quiet Split… Two Economies, One Country
On paper, GDP still looks okay. Forecasts hover around 2% growth.
But it’s a split screen…
Wealthier households keep spending, supported by assets
Middle and lower-income households pull back
Savings rates are still low (4.8%, well below pre-pandemic norms), while prices are about 25% higher than five years ago.
People know they should rebuild buffers… but they’re doing it with paycheques that don’t stretch like they used to.
That’s not confidence. That’s endurance.
The Tariff Hangover Is Just Starting
Many companies absorbed tariff costs last year by burning through inventory bought before the hikes.
That buffer is disappearing.
Analysts expect price increases in 2026 as businesses finally pass those costs along. In other words, the inflation people fear isn’t imaginary… it’s delayed.
The policy mess is catching up.
This Is the Warning Phase
Consumer confidence leads the economy.
It turns before GDP does. Before layoffs spike. Before earnings fall.
Right now, the signal is clear…
Americans don’t trust the trajectory.
When 330 million people hesitate in an economy powered by consumption, the slowdown doesn’t need a trigger.
It becomes self-executing.
And once that happens, the skid is already underway… whether the dashboard lights are flashing yet or not.
Source credit…
Based on analysis and data discussed by House of L (YouTube), drawing on U.S. Conference Board consumer confidence data and cited economic research.
Canada Strong Movement… House Rule & Disclosure
Canada Strong exists to defend Canadian sovereignty, democratic norms, and economic independence… without imported talking points or borrowed outrage.
House rule… Facts and good-faith discussion are welcome. I use AI tools to help turn my spoken drafts into clear writing. I’m 73, my hands shake, and I type with two fingers… so I speak first, then edit.
The ideas, positions, and final message are mine.
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If only the mainstream media would cover this more. Unfortunately, controlled as they are, they will not. We are like a man lost in the woods. He is consuming one part of his body---arm, leg,--one part after another , hoping to stay alive.
Very scary but realistic. Thanks Fred.