Gas Prices Drive Consumer Sentiment Index to All-Time Low

• The index hit 49.8, the lowest level in the survey's 73-year history, with gas prices from the Iran conflict identified as the primary driver
• Year-ahead inflation expectations surged to 4.7% (from 3.8% in March), while long-run inflation expectations climbed to 3.5%, the highest since October
• Consumer sentiment declined across all political affiliations, income levels, ages, and education groups, with business condition expectations dropping to levels comparable to tariff implementation a year earlier

Summary: Gas Prices Drive Consumer Sentiment to Historic Low

The University of Michigan's Consumer Sentiment Index plummeted to 49.8 in April 2026, marking an all-time low in the survey's 73-year history. The index dropped 3.5 points from the previous month, primarily driven by surging gasoline prices linked to the Iran war.

Key Figures:

• Consumer Sentiment Index: 49.8 (down 3.5 points)
• Year-ahead inflation expectations: 4.7% (up from 3.8% in March)
• Long-run inflation expectations: 3.5% (highest since October)
• April's inflation jump represents the largest one-month increase since April 2025

Main Drivers:

Surveys of Consumers Director Joanne Hsu noted that the Iran conflict influenced consumer sentiment primarily through gasoline price shocks. The decline affected all demographic groups across political affiliation, income, age, and education levels.

Market Implications:

Consumer expectations for business conditions fell to levels comparable to a year earlier during tariff implementation. A brief gas price softening during a two-week ceasefire announcement led to modest sentiment improvement, demonstrating the direct correlation between fuel costs and consumer confidence.

Sector Context:

The Conference Board's Consumer Confidence Index, released March 31, showed consumers' cost-of-living concerns dominating economic sentiment. Chief Economist commentary highlighted persistent pessimism about prices in consumer responses. The Conference Board's next report is scheduled for April 28, which may provide additional insights into trending consumer sentiment.

The historic low signals potential headwinds for consumer spending and economic growth as inflation expectations surge.