Consumer confidence fell to an all-time low in April as concerns grew over rising energy prices and the wider impact of the Iran war, according to a University of Michigan survey on Friday.
The university’s composite index of consumer sentiment fell to 47.6, a 10.7% drop from March and the lowest on record. The current situation and expectations index also fell by double digits on a monthly basis.
The decline in sentiment coincides with a sharp rise in inflation expectations, with respondents expecting prices to rise 4.8% a year from now, a full point increase from the March reading to the highest since August 2025. The one-year outlook as of April 2025, after President Donald Trump’s “Emancipation Day” tariff announcement, was 6.5%.
“Survey comments indicate that many consumers are blaming the Iranian conflict for unfavorable changes to the economy,” said Joan Hsu, head of the survey.
However, Su also noted that most of the interviews were completed before the April 7 ceasefire.
“Economic expectations are likely to improve once consumers are confident that supply disruptions caused by the Iran conflict are over and gasoline prices have stabilized,” he said.
The survey release comes shortly after the Bureau of Labor Statistics reported that the All-Item Consumer Price Index rose 0.9% in March, pushing the 12-month inflation rate to 3.3%. BLS officials said most of the increase in key numbers was due to higher energy prices, with little change in food inflation.
Expectations for five-year inflation rose similarly, to 3.4%, up 0.2 points from the previous month but 1 percentage point below the level a year ago, according to a University of Michigan study.
