Consumer sentiment hits record low, inflation fears rise amid Iran war

Consumer outlook plunged to a record low in April as fears mounted over rising energy prices and the broader impact of the Iran war, according to a University of Michigan survey Friday.

The university’s headline index of consumer sentiment tumbled to 47.6, down 10.7% from March to its lowest on record. Current conditions and expectations indexes also saw double-digit monthly declines.

The drop in sentiment coincided with a sharp spike in inflation expectations, with respondents seeing prices up 4.8% in a year from now, a full percentage point drop from the March reading to its highest since August 2025.

Survey comments “show that many consumers blame the Iran conflict for unfavorable changes to the economy,” said survey Director Joanne Hsu.

However, Hsu also noted that most of the interviews were completed prior to the April 7 cease fire.

“Economic expectations will likely improve after consumers gain confidence that the supply disruptions stemming from the Iran conflict have ended and gas prices have moderated,” she said.

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