U.S. consumers just delivered a blunt verdict on the war-linked gas shock: the University of Michigan’s sentiment index fell to a record-low 49.8 in April, even after a ceasefire briefly eased fuel prices. That was still worse than March’s 53.3 and below the 48.0 economists expected, showing households did not buy the idea that the worst of the disruption was over.
The survey’s director said the conflict is hitting people “primarily through shocks to gasoline,” and that military or diplomatic moves without cheaper energy are unlikely to help. In practice, that means the damage is showing up where shoppers notice it most, with the national average gasoline price above $4 a gallon and diesel above $5, while year-ahead inflation expectations jumped to 4.7 percent from 3.8 percent in March, the sharpest monthly rise since April 2025.
That leaves lower- and middle-income households under the most pressure, since more of their paychecks go to fuel and transport costs. Economists quoted in the reporting said higher diesel prices can bleed into food, appliances and other goods, and one noted that the hit to real disposable income should slow consumption growth even if the broader link between sentiment and spending is imperfect.
For now, the key test is whether the Strait of Hormuz disruption eases enough to pull fuel prices down, because consumers said they would not feel better until the route reopens and the conflict ends permanently. The Conference Board’s next confidence reading arrives Tuesday, April 28, and will show whether the rout in sentiment is deepening beyond Michigan’s survey.