Iran Conflict Sends Consumer Confidence Into a Nosedive

Consumer sentiment sank about 11% in April, extending a decline that began with the start of the Iran conflict in late February, preliminary results from the latest Surveys of Consumers at the University of Michigan. Among the survey’s findings:

• One-year expected business conditions plunged about 20% and is now 6% below last April.
• Assessments of personal finances declined about 11%, with consumers expressing a major increase in concerns over high prices and weaker asset values.
• Buying conditions for durables [appliances, major electronics, etc.] and vehicles worsened, again because of high prices.
• Year-ahead inflation expectations surged from 3.8% in March to 4.8% this month, the largest one-month increase since April 2025.

“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,” said Joanne Hsu, Director of the SOC/UM.

Open-ended comments from survey show that many consumers blame the Iran conflict for unfavorable changes to the economy. However, the research group noted that 98% of interviews were completed prior to the April 7th announcement of a temporary cease-fire. Economic expectations will likely improve after consumers gain confidence that the supply disruptions stemming from the Iran conflict have ended and gas prices have moderated, the SOC/UM said.