Consumer sentiment falls to record low

Consumer sentiment fell 11 percent this month to a record low, continuing the decline that started at the beginning of the Iran War, according to the University of Michigan Surveys of Consumers. .The index of consumer sentiment fell 10.7 percent to 47.6 from 53.3 in March, down 8.8 percent from 52.2 in April 2025 and its lowest since the survey began in 1952. The index tracking current economic conditions fell 10.2 percent to 50.1 from 55.8 in March, down 16.2 percent from 12 months earlier. The index of consumer expectations fell 10.8 percent to 46.1 from 51.7 in March, down 2 1/2 percent from 12 months ago. Expectations for business conditions over the next year fell 20 percent, down 6 percent from its April 2025 mark. Assessments of personal finances fell 11 percent, with consumers much more concerned over high prices and relatively low asset values. Year-ahead inflation predictions increased to 4.8 percent from 3.8 percent in March, its highest increase in a year and well higher than the 2.3 percent to 3.0 percent range in the two years leading up to the pandemic. Long-term inflation expectations increased to 3.4 percent from 3.2 percent in March, higher than its range of 2.8 percent to 3.2 percent in 2024. “Demographic groups across age, income and political party all posted setbacks in sentiment, as did every component of the index, reflecting the widespread nature of this month’s fall,” said Director Joanne Hsu. Most of the survey took place before President Donald Trump’s April 7 announcement that a temporary ceasefire had been reached, though tension remains over the relatively little oil passing through the Strait of Hormuz. “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,” Hsu said.Consumer confidence increased by nearly 1 point last month to 91.8 from 91.0 in February, according to The Conference Board. The index tracking consumer assessments of current business and labor market conditions increased 4.6 points to 123.3. The index based on consumers’ short-term outlooks for labor market, income and business conditions fell 1.7 points to 70.9. “Consumer confidence ticked up again in March, as a modest improvement in consumers’ views of current conditions outweighed a slight downshift in expectations for the future,” said Chief Economist Dana Peterson.