Consumer sentiment plummets to record low as Iran war jacks up inflation
By Bryan Mena, CNN
Washington (CNN) — Consumer sentiment plummeted to its lowest level on record due to frustration with price spikes from the US-Israeli war with Iran.
The University of Michigan’s latest consumer survey released Friday showed that sentiment declined 11% early this month to a reading of 47.6, lower than anything seen in the post World War II era, including during the Great Recession, the pandemic downturn and the historic inflation surge afterward.
“Open-ended comments show that many consumers blame the Iran conflict for unfavorable changes to the economy,” Joanne Hsu, the survey’s director, said in a release.
“Demographic groups across age, income, and political party all posted setbacks in sentiment, as did every component of the index, reflecting the widespread nature of this month’s fall,” she added.
However, nearly all of the survey responses were collected before President Donald Trump announced a temporary ceasefire with Iran earlier this week. Hsu said sentiment “will likely improve after consumers gain confidence that the supply disruptions stemming from the Iran conflict have ended and gas prices have moderated.”
Meanwhile, Americans’ expectations for inflation in the year ahead surged a full percentage point early this month to 4.8%, the biggest monthly increase in a year, when Trump unveiled his sweeping “Liberation Day” tariffs. Expectations for inflation over the long term, in the next five to 10 years, saw a more modest uptick, rising to 3.4% from 3.2% in March, the highest level since November.
This story is developing and will be updated.
The-CNN-Wire
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