FX.co ★ US consumer sentiment falls below 50 in April as fuel costs and inflation expectations rise

US consumer sentiment fell to a fresh low in April despite a temporary ceasefire in the conflict with Iran, as households remained deeply concerned about the longer‑term economic fallout from the war, the University of Michigan said.

The final reading of the consumer sentiment index for April declined to 49.8 points from 53.5 in March. The final figure was slightly above the preliminary estimate of 47.6, but it fell below the psychological 50‑point threshold first breached in June 2022.

Fuel prices remain dominant factor

Joanne Hsu, director of consumer surveys at the University of Michigan, said pessimism had spread across social and age groups. She noted that the two‑week pause in hostilities, extended by President Donald Trump, produced only a modest easing in gasoline prices. The principal burden on sentiment remains the effects of the blockade of the Strait of Hormuz, which pushed pump prices above $4 per gallon and contributed to the surge in March inflation.

Hsu said that military and diplomatic gains do not resonate with consumers unless they immediately translate into a broader expansion of energy supply.

Inflation expectations climb

Analysts were particularly alarmed by a sharp rise in inflation expectations. One‑year inflation expectations rose to 4.7% in April from 3.8% in March, the largest monthly increase in a year. Five‑year inflation expectations climbed to 3.5%, the highest level since October 2025.

The deterioration in business and consumer expectations echoes last year’s pattern when the US economy adjusted to aggressive protectionist measures. The data indicate that Americans are preparing for a prolonged period of elevated living costs, despite efforts by Washington to stabilize the situation in the Middle East.