Consumer sentiment falls to fresh record low in May as surging gas prices hit outlook
Fuel prices are displayed on a sign at a Shell gas station in San Diego, California, USA, on Monday, May 4, 2026.
Ariana Drehsler | Bloomberg | Getty Images
Rising gas prices due to the Iran war caused consumer sentiment to fall to a new low in early May, according to a University of Michigan survey released Friday.
The school is closely monitored Consumer Survey It posted a preliminary reading of 48.2, down 3.2% from the previous record low in April and down 7.7% from a year ago. Economists polled by Dow Jones were looking for 49.7.
Inflation fears have been the main reason for the continued downward trend in consumer attitudes.
The trend, which also saw the current conditions index fall by 9%, was “driven by an increase in concerns about high prices for both personal finance and purchasing conditions for large purchases,” said Joanne Hsu, the survey’s director.
One-third of respondents said gas prices were the biggest cause for concern. But another third also mentioned tariffs; Both were linked to President Donald Trump, who launched an attack on Iran in late February and announced an aggressive list of tariffs in April 2025.
“Taken together, consumers continue to be impacted by cost pressures driven by rising prices at the pump,” Hsu said. “Developments in the Middle East are unlikely to meaningfully boost sentiment until supply disruptions are fully resolved and energy prices fall.”
There were a few modest bright spots in the survey.
The expectation index reached 48.5, with an increase of 0.8% compared to April and 1.3% compared to the previous year. Moreover, the inflation outlook has actually eased somewhat but remains at high levels; the one-year forecast was 4.5% and the five-year forecast was 3.4%, down 0.2 points and 0.1 points, respectively, from previous readings.
Stock indices remained positive after the announcement.
The survey was released just after the Bureau of Labor Statistics reported that job creation was stronger than expected in April, with nonfarm payrolls rising by 115,000 and the unemployment rate remaining at 4.3%.
However, rising energy prices continued to be a problem. According to AAA, a gallon of regular gas averaged $4.54 nationwide on Friday; That’s up about 40 cents from a month ago and about $1.40 from the same time a year ago.
