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US Consumer Confidence Dips to All-Time Low
(MENAFN) U.S. consumer sentiment plummeted to its worst level ever recorded in April, driven by deepening anxiety over inflation and the economic consequences of the ongoing Iran conflict, final data published Friday by the University of Michigan revealed.
The University of Michigan's consumer sentiment index slid to 49.8 in April, down from 53.3 in March — a 6.6% month-over-month drop and a 4.6% decline compared to the same period last year.
Supporting indexes deteriorated across the board. The current economic conditions gauge retreated to 52.5 from 55.8 in March, while the consumer expectations index weakened to 48.1 from 51.7.
Joanne Hsu, director of the university's Surveys of Consumers, underscored the severity of the downturn: "Consumer sentiment ticked down 3.5 index points this month, now comparable to the trough seen in June 2022."
Hsu noted the erosion in confidence cut across demographic and political lines, with short- and long-term business outlook expectations both deteriorating. A brief two-week ceasefire announcement and modest dip in gasoline prices offered only limited relief to battered consumer morale.
"The Iran conflict appears to influence consumer views primarily through shocks to gasoline and potentially other prices," Hsu said, adding that only meaningful easing of supply constraints or a sustained drop in energy costs — rather than battlefield or diplomatic developments alone — could meaningfully lift sentiment.
Inflation fears intensified sharply. Consumers now expect prices to climb at an annual rate of 4.7% over the next 12 months, a steep jump from 3.8% in March. Longer-term projections also worsened, with households forecasting annual price increases of 3.5% over the next five to ten years — the most pessimistic outlook since October.
The University of Michigan's consumer sentiment index slid to 49.8 in April, down from 53.3 in March — a 6.6% month-over-month drop and a 4.6% decline compared to the same period last year.
Supporting indexes deteriorated across the board. The current economic conditions gauge retreated to 52.5 from 55.8 in March, while the consumer expectations index weakened to 48.1 from 51.7.
Joanne Hsu, director of the university's Surveys of Consumers, underscored the severity of the downturn: "Consumer sentiment ticked down 3.5 index points this month, now comparable to the trough seen in June 2022."
Hsu noted the erosion in confidence cut across demographic and political lines, with short- and long-term business outlook expectations both deteriorating. A brief two-week ceasefire announcement and modest dip in gasoline prices offered only limited relief to battered consumer morale.
"The Iran conflict appears to influence consumer views primarily through shocks to gasoline and potentially other prices," Hsu said, adding that only meaningful easing of supply constraints or a sustained drop in energy costs — rather than battlefield or diplomatic developments alone — could meaningfully lift sentiment.
Inflation fears intensified sharply. Consumers now expect prices to climb at an annual rate of 4.7% over the next 12 months, a steep jump from 3.8% in March. Longer-term projections also worsened, with households forecasting annual price increases of 3.5% over the next five to ten years — the most pessimistic outlook since October.
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