Consumer sentiment at record low because of Iran war

April 10 (UPI) -- Consumer sentiment has dropped to its lowest level on record thanks to price increases from the war with Iran, a survey released Friday indicates.

The latest survey released Friday from the University of Michigan showed that sentiment declined 11% this month to 47.6%, which is the lowest since World War II. That includes the Great Recession, the COVID-19 pandemic and the inflation spike that happened after it.

"Open-ended comments show that many consumers blame the Iran conflict for unfavorable changes to the economy," Surveys of Consumers Director Joanne Hsu 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.

Related

• Ecuador hikes tariffs to 100% on Colombia; Petro recalls envoy
• Challenge to Trump's 10% global tariffs goes to court
• Wellstory Food Festa highlights tech solutions to costs, labor crunch
• Hormuz closure likely to lead to major grocery price hikes

The survey was collected before the cease-fire announced 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."

Expectations for inflation for the rest of the year jumped a full percentage point early this month to 4.8% when Trump unveiled his sweeping "Liberation Day" tariffs.

Expectations for inflation over the next five to 10 years saw a more modest uptick, rising to 3.4% from 3.2% in March.

The Bureau of Labor Statistics announced Friday that its all-items consumer price index rose 0.9% in March, which pushes the inflation rate to 3.3%. The BLS said most of the raise came from a boost in energy prices, leaving food inflation about the same.

"Rising gas, diesel and airfare prices are already surging and squeezing American households," Heather Long, chief economist at Navy Federal Credit Union, said in commentary issued Friday. "This is only the beginning," she added.

"Negative sentiment is just one of the several ways by which the Iranian conflict will permeate through the US economy," Oren Klachkin, financial market economist at Nationwide, said in an analyst note Friday, CNN reported. "With the conflict far from resolved, we expect to see softer readings ahead."

Iranians rally after cease-fire agreement

Iranians rally after a ceasefire announcement at Enqhelab Square, in Tehran on April 8, 2026. Photo by Behnam Tofighi/UPI | License Photo