US Consumer Sentiment Reaches Historic Lows Amid Rising Inflation Concerns

US Consumer Sentiment Hits Record Low in April Amid Iran War Fears

US consumer sentiment has plummeted in April to a record low, driven by concerns over the economic fallout from the ongoing Iran war. According to data released by the University of Michigan, the final April sentiment index dropped to 49.8 this month, down from 53.3 in March. Although this is a slight improvement from the preliminary reading, it remains the lowest in data going back to 1978.

The data shows that consumers expect prices to rise at an annual rate of 4.7% over the next year, a significant increase from the 3.8% in March. This marks the largest one-month increase since President Donald Trump announced sweeping tariffs last year. Furthermore, consumers predict costs will rise at an annual rate of 3.5% over the next five to 10 years, the highest since October.

The Iran war has been a major contributor to the decline in consumer sentiment, driving up fuel costs for inflation-weary Americans. Despite the US and Iran agreeing to a temporary ceasefire, the absence of a permanent deal to end the war has kept uncertainty elevated for consumers and weighed on the outlook.

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The survey found that consumers expect gas prices to climb nearly 50 cents in the coming year, with nearly two-thirds of respondents expecting fuel costs to be higher a year from now, the largest share since 2022. The current conditions gauge declined in April to a four-month low, while the expectations index dropped to the lowest in nearly a year. Consumers' perceptions of their expected financial situation were the weakest since May of last year.

The survey period includes responses from March 24 to April 20.