Consumer sentiment remains near four-year low

Consumer sentiment was little changed this month and remains near its lowest mark since summer 2022, according to the University of Michigan Surveys of Consumers..The index of consumer sentiment fell 3.2 percent to 48.2 from 49.8 in April, 7.7 percent under its year-ago mark. “Consumers continue to feel buffeted by cost pressures, led by soaring prices at the pump,” said Surveys of Consumers Director Joanne Hsu. “Middle East developments are unlikely to meaningfully boost sentiment until supply disruptions have been fully resolved and energy prices fall.”The current economic conditions index fell 9 percent to 47.8 from 52.5, 18.8 percent below its mark of 58.9 in May 2025. Hsu attributed the drop to concerns over the impact of high prices on personal finances and buying conditions for major purchases. The index tracking consumer expectations increased 0.8 percent to 48.5 from 48.1 in April, 1.3 percent higher than its year-ago reading of 47.9. The annual inflation rate increased 3.3 percent in March, a nearly two-year high amid rising energy costs from the war, according to the Bureau of Labor Statistics. Year-ahead inflation expectations dropped to 4.5 percent from 4.7 percent in April, higher than the 3.4 percent reading in February before the war started between Israel/ the United States and Iran. Long-term inflation expectations fell to 3.4 percent from 3.5 percent in April. Consumer confidence increased last month to 92.8 from 92.2 in March, according to The Conference Board Consumer Confidence Index. The index tracking consumer assessments of current labor and business conditions fell 0.3 points to 123.8, while the index based on short-term outlooks for income, business and labor market conditions increased 1.2 points to 72.2. “Consumer confidence edged up in April but was overall little changed, despite material concern about rising gasoline prices as the war in the Middle East prompted a surge in Brent crude oil prices,” said The Conference Board Chief Economist Dana Peterson.