University of Michigan Consumer Sentiment Hits Record Low

University of Michigan consumer sentiment fell to 47.6 in a preliminary April 2026 reading, down from 53.3 in March, marking the lowest level in the survey’s 74-year history as concerns over the Iran war pushed inflation expectations and gas prices higher.

Record Low Sentiment Across Demographics

The preliminary April reading represented a 10.7% month-over-month decline and stood nearly 9% below April 2025, dropping below levels seen during the Great Recession and the COVID-19 lockdowns. The decline was broad, affecting all age groups, income brackets, and political affiliations, signaling widespread weakening in consumer perceptions.

Measures of near-term economic prospects deteriorated sharply. Expectations for business conditions over the next year plunged about 20%, while assessments of personal finances fell roughly 11%, indicating that the sentiment decline extended beyond headline figures to consumers’ own outlooks.

Inflation Expectations Rise Amid Iran War

Year-ahead inflation expectations jumped to 4.8% from 3.8%, marking the largest monthly increase since April 2025 and reflecting a swift re-anchoring of near-term price concerns. Long-run inflation expectations edged up slightly.

The survey collected responses from March 24 to April 7, 2026, with 98% returned before a temporary ceasefire announcement, so the results largely reflect earlier developments in the Iran conflict. Rising inflation expectations combined with a fuel-cost shock linked to the war indicate an upward shift in the inflation trajectory. Open-ended survey comments showed many consumers attributed worsening business conditions and household finances to the Iran conflict, a pattern often described as Iran war inflation.