US consumer sentiment reached a record low of 49,8 points in april, according to a University of Michigan survey. While this figure was higher than the 48 points forecast by Reuters-polled experts, it still marked the lowest level ever recorded.

This decline follows an index reading of 53,3 points last month. In april, the drop in sentiment was observed across all consumer groups, irrespective of political views, income levels, or stock market investment status.

Joanne Hsu, director of the University of Michigan survey, noted that the Middle East conflict primarily impacted US consumers through a gasoline price shock, which could extend to other commodities. "Military and diplomatic developments have not yet resolved supply constraints or energy price pressures, making it difficult for confidence to improve," she stated.

Shoppers at Whole Foods Market in New York on 23/7/2025. *Photo: Reuters*

Data from the US Energy Information Administration (EIA) shows that in april, the average retail price for gasoline in the US was over 4 USD per gallon, and diesel was over 5 USD. Experts predict that low-income households will cut back on spending. Grace Zwemmer, an economist at Oxford Economics, noted that "the impact of gasoline prices on real disposable income growth will slow consumer spending."

The Middle East conflict has disrupted the Strait of Hormuz – a crucial waterway for approximately 20% of global oil and liquefied natural gas (LNG) shipments. Although not directly dependent on this supply, the US has been heavily impacted by soaring oil prices, which at one point neared 120 USD per barrel, leading to energy cost inflation and rising commodity prices.

Heather Long, chief economist at Navy Federal Credit Union, warned that the challenge would intensify as rising shipping costs are passed on to final consumers. "Market sentiment will not improve until the Strait of Hormuz is reopened and the conflict ends," she said.

Consumer inflation expectations for the coming year rose to 4,7%, up from 3,8% in march. This figure also surpassed the levels recorded in 2024 and is significantly higher than the 2,3%-3% range observed in the two years preceding the Covid-19 pandemic.

Phien An