The University of Michigan’s Surveys of Consumers released preliminary data on March 26, 2026, showing a significant decline in U.S. consumer sentiment. The headline index for April 2026 fell to -28.0 points, representing a 3.2-point decrease from the -24.8 reading recorded in March. This decline marks a continuation of downward trends as geopolitical instability and domestic economic pressures weigh on household outlooks.
According to the report, the primary catalyst for the drop is the ongoing military conflict involving Iran. Consumers expressed heightened concern regarding the regional stability of the Middle East and its direct impact on global supply chains. Specifically, the conflict has led to a sharp increase in energy prices. The survey noted that the average consumer's expectation for gasoline price increases over the next twelve months has risen significantly, contributing to a broader sense of financial insecurity.
The Current Economic Conditions sub-index fell to -31.5 in April, down from -28.2 in the previous month. Simultaneously, the Index of Consumer Expectations, which reflects the six-month outlook, declined to -25.7 from -22.6. Joanne Hsu, Director of the Surveys of Consumers, stated in the release that the combination of geopolitical risk and persistent inflation is eroding the confidence that had begun to stabilize earlier in the year.
Inflation expectations saw a notable uptick in the March 26 report. Year-ahead inflation expectations rose to 4.9%, up from 4.3% in March. Long-run inflation expectations also moved higher, reaching 3.4% compared to 3.0% in the prior month. These figures suggest that consumers are increasingly skeptical that price pressures will subside in the near term, particularly as energy costs remain volatile due to the Iran crisis.
Furthermore, the report highlighted a noticeable dampening of income expectations. The share of consumers expecting their incomes to grow at a slower pace than inflation reached 58%, the highest level in eighteen months. Many respondents cited the rising cost of living and the potential for broader economic disruption stemming from the war as reasons for their cautious outlook.
The data also revealed a shift in buying attitudes for durable goods. The percentage of consumers stating it is a bad time to buy major household appliances and vehicles rose to 64%, primarily due to high prices and concerns over future interest rate trajectories. This sentiment was consistent across various demographic groups, though lower-income households reported the most significant declines in confidence.
The University of Michigan will release the final April sentiment figures on April 24, 2026, following the collection of additional survey data through the end of the month.