In April, consumer confidence fell to an unprecedented low, driven by escalating concerns regarding rising energy prices and the wider implications of the Iran war, as reported. The university’s headline index of consumer sentiment fell to 47.6, a decline of 10.7% from the March survey, marking its lowest point on record. Both the current conditions and expectations indexes experienced significant double-digit declines this month.

The decline in sentiment occurred alongside a significant increase in inflation expectations, with participants anticipating a 4.8% rise in prices over the next year, marking a full percentage point increase from the March figure and reaching its peak since August 2025. The one-year outlook in April 2025 stood at 6.5% after President Donald Trump’s “liberation day” tariff announcement. “Survey comments show that many consumers blame the Iran conflict for unfavorable changes to the economy,” said the survey’s director, Joanne Hsu.

However, Hsu also pointed out that the majority of the interviews were conducted prior to the ceasefire on April 7. The survey, therefore, predominantly captures the conditions from March. “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 stated. The survey release followed closely on the heels of the Bureau of Labor Statistics’ report indicating that the all-items consumer price index increased by 0.9% in March, resulting in a 12-month inflation rate of 3.3%.

Officials stated that the majority of the rise in the headline figure was attributed to the spike in energy prices, while food inflation remained relatively stable. Inflation expectations for the five-year period in the University of Michigan survey have risen to 3.4%, reflecting a monthly increase of 0.2 percentage points, although this figure remains one percentage point lower than it was a year ago.