U.S. Consumer Sentiment Hits Record Low Amid Soaring Gasoline Prices

The University of Michigan Survey of Consumers posted an index of 48.2 for May 2026, the lowest reading since the survey began. The figure fell 1.6 points from April’s 49.8 and 7.7 points from a year earlier, reflecting anxiety about personal finances and major-purchase conditions.

Reuters

Gasoline prices surged after the United States entered a confrontation with Iran in late February 2026, tightening global oil supplies. At the same time, tariffs announced by President Donald Trump in April 2025 remain in force, adding a separate cost burden. Respondents identified higher pump prices and the tariff regime as primary concerns.

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Gasoline averaged $4.54 per gallon, up $0.40 from the prior month and $1.40 from a year ago (AAA). Inflation expectations fell to 4.5 % for the next year and 3.4 % for five years. April non-farm payrolls rose by 115,000 and unemployment stayed at 4.3 % (BLS). One-third of respondents cited gas prices and another one-third cited tariffs as the biggest worry.

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A record-low sentiment index signals reduced consumer confidence, historically curbing discretionary spending and delaying purchases of durable goods like vehicles and appliances. Ongoing fuel-price pressure erodes disposable income, potentially slowing growth even as the labor market stays solid.

Reuters

Survey director Joanne Hsu said consumers feel “buffeted by cost pressures, led by soaring prices at the pump.” She added that “Middle-East developments are unlikely to meaningfully boost sentiment until supply disruptions have been fully resolved and energy prices fall.” Hsu noted the decline in inflation expectations offers limited reassurance.

Reuters

The survey shows many households blame President Trump’s 2025 tariff agenda for intensifying rising energy costs. Critics say the trade measures have added to household expense burdens without delivering offsetting economic benefits.

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• “Consumers continue to feel buffeted by cost pressures, led by soaring prices at the pump,” — Joanne Hsu, Director, University of Michigan Surveys of Consumers

Reuters

• “Middle East developments are unlikely to meaningfully boost sentiment until supply disruptions have been fully resolved and energy prices fall.” — Joanne Hsu, Director, University of Michigan Surveys of Consumers

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• “One-third of respondents mentioned gas prices as the biggest cause of concern.” — Article reporting the Michigan survey

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• “Taken together, consumers continue to feel buffeted by cost pressures, led by soaring prices at the pump,” — Joanne Hsu, Director, University of Michigan Surveys of Consumers

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The University of Michigan will publish a final May reading later this month, and analysts will watch gasoline price trends and any policy adjustments that could ease household cost pressures.

Reuters