High gas prices have prompted a push from the University of Michigan Consumer confidence index to the lowest level recorded in its history spanning more than 73 years.
The index fell by 3.5 points in April, to 49.8, amid rising prices caused by the Iran war, according to consumer surveys. Final results For the month of April.
“The Iranian conflict appears to be influencing consumer sentiment primarily through shocks to gasoline and perhaps other prices,” Director of Consumer Surveys Joan Hsu He said in the report. “In contrast, military and diplomatic developments that do not lift supply constraints or lower energy prices are unlikely to support consumers.”
The correlation between the price of gas and consumer sentiment was seen earlier in April, when a decline in gas prices triggered by the announcement of a two-week ceasefire was followed by a modest improvement in consumer sentiment, according to the report.
The decline in consumer sentiment in April was seen across political affiliation, income, age and education, according to the report.
Consumer surveys also found that consumer expectations of business conditions over both short and long time horizons fell to levels that were nearly as low as those seen a year ago when the tariffs were implemented.
Advertisement: Scroll to continue
It also found that consumers’ inflation expectations for next year rose from 3.8% in March to 4.7%, the largest single-month increase since April 2025, and longer-term inflation expectations rose to 3.5%, the highest reading since October.
Conference BoardLatest Consumer confidence indexwhich was released on March 31, about a month after the war began, found that consumer confidence rose in March despite higher costs due to tariffs and the war.
The impact of higher costs was not seen in the organization’s leading or component indices but was evident in 12-month consumer inflation expectations, which rose to their highest levels since August, the Conference Board said in a March 31 news release.
“Consumers’ written responses on factors affecting the economy continued to skew toward pessimism,” Conference Board chief economist Dana M. Peterson he said in the release. “Comments on prices and cost of goods indicate that the cost of living remains top of mind for consumers.”
The Conference Board is scheduled to release its next consumer confidence index on Tuesday (April 28).
