Consumer sentiment plunged in early April to the lowest level in the survey’s seven-decade history, as the Iran conflict weighed heavily on Republican household views of the economy, according to the University of Michigan’s preliminary survey released Friday.
The Index of Consumer Sentiment fell to 47.6 from 53.3 in March, a decline of nearly 11 percent. The reading eclipses the previous all-time low of 50.0 set in June 2022 during the post-pandemic inflation surge. The survey window ran from March 24 to April 7, with 98 percent of interviews completed before the April 7 announcement of a temporary cease-fire. The result came in below all but one estimate in a Bloomberg survey of economists.
Republican sentiment, which has remained elevated throughout the past year, dropped from 92.2 to 87.1. The sharpest move came in Republican assessments of current economic conditions, which fell nearly 10 points to 79.8 — the lowest since November 2025. Democratic sentiment slid further to 31.8 from 36.4, extending a prolonged trough. Independents posted a modest overall decline to 46.7, though their assessment of current conditions ticked up slightly — an anomalous reading given the broad deterioration elsewhere in the survey.
The Current Economic Conditions index dropped to a record-low 50.1 from 55.8 in March, while the Index of Consumer Expectations fell to 46.1, the weakest reading since 1980. Consumers’ perceptions of their current financial situation matched the worst since 2009.
Surveys of Consumers Director Joanne Hsu said the decline was broad-based, with setbacks across age, income, and political affiliation. One-year expected business conditions fell roughly 20 percent to the lowest level since mid-2022.
Consumers reported growing anxiety over high prices and weakening asset values, with assessments of personal finances declining about 11 percent. Buying conditions for durable goods and vehicles also deteriorated. Open-ended responses pointed directly to the Iran conflict as the source of unfavorable economic changes. Gasoline prices, well above $4 a gallon and the highest since 2022, have added to pressure on household budgets.
Hsu indicated that expectations are likely to recover once consumers gain confidence that supply disruptions from the conflict have subsided and gasoline prices have moderated.
Inflation expectations surged. The year-ahead measure jumped a full percentage point to 4.8 percent from 3.8 percent in March, the largest single-month increase since April 2025, when President Trump announced sweeping tariffs. The reading remains well above the 2.3-to-3.0 percent range that prevailed in the two years before the pandemic. Long-run inflation expectations edged up to 3.4 percent from 3.2 percent, the highest since November 2025.
Separate data released Friday underscored the price pressures weighing on households. The consumer price index rose 0.9 percent in March, the largest monthly increase since 2022, driven by a record surge in gasoline prices. Food prices were flat for the month. Outside of food and energy, consumer prices rose a mild 0.2 percent for the month and are up 2.6 percent from a year ago.
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