U.S. consumer sentiment slid to a record low in April as the Iran war’s gasoline shock kept households gloomy even after a ceasefire. The University of Michigan’s final reading came in at 49.8, up from the 47.6 preliminary figure but still below March’s 53.3 and the weakest in the survey’s 73-year history.
The hit has been running through energy prices and then into expectations. Joanne Hsu said the conflict is affecting views mainly through shocks to gasoline and other prices, while the survey showed year-ahead inflation expectations jumping to 4.7 percent from 3.8 percent and five-year expectations rising to 3.5 percent.
That puts pressure on consumers already paying more at the pump, with national gasoline prices hovering above $4 a gallon and diesel above $5, according to the Energy Information Administration data cited in the reporting. Economists expect the squeeze to land hardest on low- and middle-income households, and to bleed into goods moved by truck, ship and plane, from food to appliances.
For now, the key question is whether the ceasefire and any sustained reopening of the Strait of Hormuz can cool fuel costs quickly enough to stabilize sentiment before higher transportation costs show up in retail prices. The Conference Board’s next consumer confidence reading, due Tuesday, will offer the first fresh read on whether April’s collapse is starting to seep into broader household behavior.
