Summary
- The University of Michigan's consumer sentiment index fell to a record low in April, dropping below the level seen during the inflation crisis that followed the pandemic in 2022.
- About two-thirds of respondents expect gasoline prices to rise over the next year, with higher inflation expectations cited as a key driver of weaker consumer sentiment.
- Markets said continued deterioration in consumer sentiment could lead to future economic slowdown pressure.
Forecast Trend Report by Period
U.S. consumer sentiment fell to a record low as fears grew that a prolonged war involving Iran would drive prices higher.
Forbes reported on April 27 that the University of Michigan's consumer sentiment index fell to an all-time low in April, dropping below the level seen during the inflation crisis that followed the pandemic in 2022.
Higher inflation expectations were cited as a key reason for the decline. About two-thirds of respondents said they expect gasoline prices to rise over the next year.
Consumer spending has held up so far, but economists say households may cut discretionary purchases if the effect of tax refunds fades.
Forbes said the war involving Iran is pushing up energy prices, adding to broader inflation pressures and weighing on consumer sentiment.
Markets are also watching for weaker sentiment to translate into pressure on economic growth if the deterioration continues.
Minseung Kang
minriver@bloomingbit.ioBlockchain journalist | Writer of Trade Now & Altcoin Now, must-read content for investors.
