Consumer Confidence Plummets to Historic Low in April

U.S. consumer sentiment fell to a record low in early April 2026, as households reported growing dissatisfaction with rising prices that they linked to the U.S.-Israeli conflict with Iran, according to survey data.

The University of Michigan’s consumer survey showed sentiment dropped 11% from March to a reading of 47.6. The survey described this as the lowest level recorded in the post-World War II era, below readings seen during the Great Recession and the downturn associated with the COVID-19 pandemic.

The decline was described as broad-based, spanning demographic groups across age, income, and political affiliation. Respondents cited the Iran conflict as a key factor behind what they viewed as unfavorable economic changes, the survey indicated.

At the same time, inflation expectations moved higher. The survey reported that Americans’ expectations for inflation over the next year rose by a full percentage point to 4.8%, described as the largest monthly increase in a year. Longer-run inflation expectations for the next 5 to 10 years also increased, rising to 3.4% from 3.2% in March, which the survey said was the highest level since November.

The sentiment results coincided with separate inflation data from the Bureau of Labor Statistics. That report showed the Consumer Price Index increased 0.9% in March, the sharpest monthly gain since 2022, lifting the annual inflation rate to 3.3%, its highest in nearly two years.

Officials and data pointed to higher costs in categories tied closely to energy and travel. Rising prices for gasoline, diesel, and airfare were cited as significant contributors to inflation pressures, alongside expectations for additional increases in those costs.

For markets and policymakers, the combination of weaker sentiment and higher inflation expectations underscores the tension between consumer confidence and price stability. The data also highlights how geopolitical developments can coincide with shifts in household expectations and near-term inflation readings, particularly when energy and transport-related prices are moving higher.

Even with the sharp moves reported, uncertainty remains around how persistent these expectations will be and whether subsequent data will confirm the same pace of price increases. The survey and CPI report provide snapshots for early April 2026 and March, respectively, and future releases will determine whether the deterioration in sentiment and the rise in inflation expectations continue.