U.S. consumer sentiment fell to a record low in April due to inflationary concerns tied to the Middle East conflict, according to the latest University of Michigan consumer sentiment survey.
The University of Michigan’s consumer sentiment index dropped to 49.8, from 53.3 last month. That is below the previous low of 50 seen in June 2022, when shoppers faced searing inflation, and the worst reading in the more than 50-year history of the Michigan survey.
The final 49.8 reading came in slightly above the preliminary April figure of 47.6 published two weeks ago, as responses collected later in the survey period after the U.S. and Iran agreed to a two-week ceasefire on April 7 turned more positive, according to Michigan survey director Joanne Hsu.
Hsu said in her commentary, “Consumer sentiment ticked down 3.5 index points this month, now comparable to the trough seen in June 2022. Decreases in sentiment were seen across political parties, income, age, and education. Expected business conditions declined for both short and long-time horizons, nearly matching year-ago readings when the reciprocal tariff regime was implemented. After the two-week cease-fire was announced and gas prices softened a touch, sentiment recovered a modest portion of its early-month losses. The Iran conflict appears to influence consumer views primarily through shocks to gasoline and potentially other prices. In contrast, military and diplomatic developments that do not lift supply constraints or lower energy prices are unlikely to buoy consumers.
“Year-ahead inflation expectations surged from 3.8 percent in March to 4.7 percent this month, the largest one-month increase since April 2025. The current reading exceeds those seen in 2024 and remains well above the 2.3-3.0 percent range seen in the two years pre-pandemic. After hovering between 3.2 and 3.3 percent for the previous four months, long-run inflation expectations climbed to 3.5 percent in April, the highest reading since October 2025. In 2024, values ranged between 2.8 percent and 3.2 percent, while in 2019 and 2020, they were consistently below 2.8 percent.”
Chart courtesy University of Michigan
