Consumer sentiment fell to a record low in April, dropping lower than it did during the worst of the Great Recession and when the country was locked down during the pandemic.
Consumer sentiment fell to 47.6, down from 53.3 in March, according to a preliminary reading of the University of Michigan Consumer Sentiment Index for April. Consumer sentiment is now down 10.7% from a month ago and nearly 9% from a year ago.
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The decline began with the start of the war with Iran, and all demographic groups, including age, income, and political party, reported a drop in sentiment, according to Joanne Hsu, the survey director.
One-year expected business conditions plunged about 20%, and assessments of personal finances by about 11%.
“Open-ended comments show that many consumers blame the Iran conflict for unfavorable changes to the economy,” Hsu said.
It is worth noting that 98% of the sentiment interviews were conducted before this week’s announcement of a temporary ceasefire.
“Economic expectations will likely improve after consumers gain confidence that the supply disruptions stemming from the Iran conflict have ended and gas prices have moderated,” Hsu added.
Gas prices have spiked with the war, adding to affordability concerns already plaguing consumers. As of Friday, a gallon of regular gasoline in the U.S. averaged $4.15, according to AAA. That is up nearly 30% from a year ago.
The sentiment report comes the same day that the government released its inflation report for March. The consumer price index showed that inflation spiked nine-tenths of a percentage point to 3.3% on the year, with energy prices driving much of that increase.
In March alone, prices rose 0.9%.
The consumer sentiment report showed that year-ahead inflation expectations jolted from 3.8% in March to 4.8% in April. That marks the biggest monthly increase since April 2025, around the time when President Donald Trump’s “Liberation Day” tariffs were announced. Long-run inflation expectations also increased slightly.
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Trump has seen his economic approval ratings fall dramatically since he entered office, in large part because of voter discontent with affordability. The higher inflation prints threaten to imperil Republicans in the midterm elections.
“Economists say once the inflation genie is out of the bottle, it is nearly impossible to cancel the price increases and return costs back down to where they were,” said Chris Rupkey, chief economist at FWDBONDS. “Time will tell if fed-up consumers go on strike. Stay tuned. Hopefully, the worst is still not to come.”
