American consumers are facing the worst economic pessimism in recorded history, according to a report by Fortune.
The University of Michigan’s Consumer Sentiment Index dropped to 47.6 in preliminary April 2026 readings released Friday. This represents a 10.7% decline from March’s 53.3 and breaks the previous record low of 50 set in June 2022.
Three of the lowest consumer sentiment readings ever recorded have occurred within the last nine months of Donald Trump’s second term, Fortune reported.
Geopolitical tension fuels inflation
The primary driver for the April collapse is the ongoing war in Iran, according to the outlet. Survey director Joanne Hsu noted that sentiment has been sliding since the conflict began.
Economic anxiety appears to be broad-based, affecting various demographics across age, income, and political party. One-year business condition expectations fell roughly 20% compared to a year ago.
“Economic expectations will likely improve once consumers feel assured that the supply disruptions caused by the Iran conflict have resolved and that gas prices have moderated,” Hsu said.
However, the war is compounding existing economic pressures. March price data from the Bureau of Labor Statistics showed a 0.9% monthly jump in the consumer price index, an annualized rate of nearly 11%.
Energy prices are the primary culprit behind this spike. One-year inflation expectations jumped from 3.8% in March to 4.8% in April, the largest single-month increase since April 2025.
While the 2022 lows under President Biden were driven by post-pandemic inflation and supply chain issues, the current downturn involves a more complex mix of factors. These include tariff uncertainty, the Iran conflict, and volatile energy costs.
Unlike the supply chain disruptions of the previous administration, economists suggest that geopolitical conflicts in critical oil-producing regions are much harder to resolve through monetary policy.
