Iran Conflict Backfires, US Consumer Confidence Plummets

NEW YORK — US consumer confidence plunged to the lowest level in history in April 2026, amid growing concerns over surging energy prices and the broader impact of the Iran conflict on the economy.

The University of Michigan survey showed the consumer sentiment index falling to 47.6, a 10.7 per cent drop from March 2026.

This decline marks the deepest since the survey began, with both the current conditions and expectations indices recording double-digit monthly drops.

“Survey comments indicate that many consumers blame the Iran conflict for the unfavourable changes in the economy,” said Hsu, quoted from CNBC on Monday (13/4/2026).

However, Hsu noted that most interviews in the survey were conducted before the ceasefire on 7 April 2026, so the results more reflect economic conditions in March 2026.

“Economic expectations are likely to improve once consumers are convinced that supply disruptions from the Iran conflict have ended and petrol prices have moderated,” he said.

Respondents expected prices to rise 4.8 per cent over the next 12 months, up one percentage point from the previous month and the highest level since August 2025.

By comparison, one-year inflation expectations reached 6.5 per cent in April 2025 following President Donald Trump’s announcement of “liberation day” tariffs.

For the five-year term, inflation expectations also rose to 3.4 per cent, up 0.2 percentage points from the previous month, though still one percentage point lower than the same period last year.

BLS officials stated that most of the increase was driven by the surge in energy prices, while food inflation remained relatively unchanged.

This inflation rise was also highlighted in a separate report stating that the US inflation rate in March was the highest in nearly two years.

Quoted from BBC, US annual inflation rose from 2.4 per cent in February 2026 to 3.3 per cent in March 2026, driven by the oil price spike due to the US-Israel and Iran conflict.