Story perspectives

Consumer Confidence Slides as Gas Prices Hit $4.49, Inflation Peaks

5/27/2026

Summary

Consumers Cut Spending

Consumer confidence index fell 0.7 points to 93.1 in May, ending gains.
Gasoline prices rose to $4.49 per gallon, up from $2.98 before the war began in February.
Inflation climbed to 3.8% in April, the highest in three years and above the Fed’s 2% target.
Two-thirds of respondents reported cutting back spending and a decline in price-adjusted average hourly earnings in April, the first such drop in three years.

Summary

Trump Rating Falls

U.S. President Donald Trump’s approval rating fell to its lowest since January 2025, per Reuters/Ipsos poll, pressuring Republicans ahead of November midterms.
Heather Long of Navy Federal Credit Union said shoppers are upset about prices, while Dana Peterson of the Conference Board said high war mentions signal Iran-related inflation fears.
Michael Gapen of Morgan Stanley warned that despite a 1.7% rise in home prices through March, higher mortgage rates hurt affordability.

History

Historical Context

The 1979 U.S. energy crisis, sparked by the Iranian Revolution and OPEC’s price hikes, pushed world oil to over $35 per barrel in 1980 and cut U.S. consumption by 13% between 1979 and 1981. The shock spurred President Jimmy Carter’s energy policies and later, a 1980s oil glut that halved prices by 1986, shaping today’s sensitivity to fuel-price spikes.

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Consumers Cut Spending

Consumer confidence index fell 0.7 points to 93.1 in May, ending gains.
Gasoline prices rose to $4.49 per gallon, up from $2.98 before the war began in February.
Inflation climbed to 3.8% in April, the highest in three years and above the Fed’s 2% target.
Two-thirds of respondents reported cutting back spending and a decline in price-adjusted average hourly earnings in April, the first such drop in three years.

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