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Consumer confidence across the United States plunged to an all-time low this month, as Americans grapple with anxiety over the war in Iran, new data revealed.
The University of Michigan’s long-running Survey of Consumers tracks how Americans feel about the economy, their personal finances and spending — shaped by factors like inflation, the cost of living and global conflicts.
Earlier this month, preliminary data showed the consumer sentiment dropped a drastic 11% to a historic low of 47.6 — a level below anything recorded in the post–World War II era, including during the Great Recession, the pandemic slump, and the subsequent surge in inflation, CNN reported.
April’s final reading showed a modest uptick to 49.8, but it remains notably below last month’s 53.3, raising continued concerns, according to the Wall Street Journal.
This month’s record-low data reflects the troubling sentiment about the country’s economic stability and the concerns weighing on Americans right now, including the war in Iran, according to the survey’s director, Joanne Hsu.
“Open-ended comments show that many consumers blame the Iran conflict for unfavorable changes to the economy,” Hsu said, CNN reported.
“Demographic groups across age, income, and political party all posted setbacks in sentiment, as did every component of the index, reflecting the widespread nature of this month’s fall,” she added.
It is important to note, however, that survey responses for April were collected before President Donald Trump announced the ceasefire and subsequent ceasefire extension with Iran this week.
Hsu believes consumer sentiment “will likely improve after consumers gain confidence that the supply disruptions stemming from the Iran conflict have ended and gas prices have moderated.”
While it’s not surprising that consumer confidence is low due to stubborn inflation, a troubling job market, and political tensions within the US and abroad, reports suggest that consumer spending has not changed too drastically, giving consumers a glimmer of hope.
Data for April isn’t available yet, but US retailers reported solid sales gains in March — and the major banks’ first-quarter earnings indicate household finances are holding up well, which is reassuring for consumers, the Wall Street Journal reported.
At the same time, Americans’ short-term inflation outlook jumped by a full percentage point to 4.8% early this month — the largest monthly increase in a year — following the rollout of sweeping “Liberation Day” tariffs, according to CNN.
Long-term expectations for inflation, within the next five to 10 years, rose more modestly to 3.4% from 3.2% in March, reaching their highest level since November.
As the battle between the US and Iran continues, amidst rising inflation and a dire job market, consumer sentiment is only expected to drop as Americans face rising costs.
“More pain will come as higher transportation costs are passed along for food, appliances, toys, and every other item that travels on a ship, car or plane,” Long cautioned, according to Reuters.
“Sentiment won’t improve until the Strait of Hormuz is open, and there is a permanent end to the conflict,” she warned.
