The University of Michigan’s Consumer Sentiment Index plummeted 11% to a historic low of 47.6 in early April 2026, far below both market expectations of 52 and last year’s level by 9%. Nearly all surveys (98%) were conducted before the temporary cease-fire announcement, underscoring the Iran conflict’s immediate impact on confidence. Sentiment declined across all demographics, as well as every index component, signaling a broad-based drop. One-year business condition expectations crashed 20%, while assessments of personal finances fell 11%, with consumers citing rising prices and shrinking asset values as key concerns. Buying conditions for durables and vehicles deteriorated further, again due to high costs linked to the war. Year-ahead inflation expectations spiked to 4.8% from 3.8% in March, the largest one-month jump since April 2025, while long-term inflation expectations rose to 3.4%, the highest since November 2025.
