U-Mich Consumer Sentiment Falls to 47.6 as Gas Prices Rise

The University of Michigan preliminary April consumer sentiment index dropped to 47.6, below the 52.0 consensus estimate and down from March’s 53.3. The reading is the lowest on record and represents an 8.8% decline from a year earlier.

The decline was broad-based across demographic groups. The current conditions component fell to 50.1 from 55.8 in March, a 16.2% year-over-year decrease. The expectations component slipped to 46.1 from 51.7 last month, down 2.5% from April a year ago.

Short-term inflation expectations rose to 4.8% from 3.8% in March, while five-year inflation expectations increased to 3.4% from 3.2%. The one-year jump is the largest single-month increase since April 2025, and the five-year reading is the highest since November 2025.

Gasoline prices moved sharply higher after the start of the Iran conflict, rising from about $2.89 nationally before the outbreak to roughly $4.15 at the time of the survey. Many respondents cited higher fuel costs in open-ended answers as a factor reducing confidence. The report notes 98% of interviews were completed before the April 7 announcement of a temporary cease-fire.

Joanne Hsu, director of the University of Michigan Survey, said, “Consumer sentiment sank about 11% this month, extending a decline that began with the start of the Iran conflict, and is currently about 9% below a year ago. Demographic groups across age, income, and political party all posted setbacks in sentiment, as did every component of the index.” Hsu also reported that one-year expected business conditions plunged about 20% and are now 6% below last April, while assessments of personal finances fell roughly 11%.

The survey showed buying conditions for durables and vehicles worsened, driven by higher prices. The report cautioned that survey results can move quickly and noted that economic expectations could improve if supply disruptions related to the conflict end and gasoline prices moderate.