All-time high since 1978. Last time it was close: 1980. Stagflation. Fed had to go to 20%.

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Consumer sentiment hits record low, inflation fears rise amid Iran war

Consumer confidence plunged to a record low in April as fears mounted over rising energy prices and the broader impact of the Iran war, according to a University of Michigan survey Friday.

The university’s headline index of consumer sentiment tumbled to 47.6, down 10.7% from the March survey to its lowest on record. Current conditions and expectations indexes also saw double-digit monthly declines.

The drop in sentiment coincided with a sharp spike in inflation expectations, with respondents seeing prices up 4.8% in a year from now, a full percentage point rise from the March reading to its highest since August 2025. The one-year outlook in April 2025 was 6.5% following President Donald Trump’s “liberation day” tariff announcement.

Survey comments “show that many consumers blame the Iran conflict for unfavorable changes to the economy,” said the survey’s director, Joanne Hsu.

Uncomfortably high inflation is a real problem and it’s not going away anytime soon

Here’s something no American wants to hear: Prices are surging again, and uncomfortably high inflation could be with us for quite some time.

Inflation has been a thorn in the US economy’s side since 2021, and though price increases have cooled off dramatically in the past few years, the problem never really went away: Inflation still hasn’t returned to pre-pandemic levels, and Americans haven’t yet adjusted to higher prices. That’s why the cost of living has remained Issue No. 1 for voters in poll after poll.

This oil price shock almost certainly will not translate into the 9.1% four-decade high inflation that the United States painfully endured in 2022. But key differences between the situation today and four years ago could make this latest war-induced inflation spike very difficult to bear.