Consumer Sentiment: War Sparks Renewed Fears About the Economy

Consumer sentiment, also known as consumer confidence, measures how U.S. consumers feel about the economy, wages, jobs and their personal finances.

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Updated on May 7. Updated on May 7 . Findings from the three major consumer sentiment indexes show increasing uncertainty over the war in Iran, even with a fragile ceasefire in place.

University of Michigan: Sentiment sinks again

The University of Michigan’s Index of Consumer Sentiment plummeted from March to April, according to the final results for the month released on April 24.

The university’s Index of Consumer Sentiment registered at 49.8 in April, compared to 53.3 in March, according to the survey. Current Economic Conditions was 52.5 in April, compared to 55.8 in March. The Index of Consumer Expectations registered at 48.1 for April, compared to 51.7 for March, falling below the previous record low of 50 set in June 2022. The University of Michigan’s Index of Consumer Sentiment plummeted from March to April, according to the final results for the month released on April 24.

The university’s Index of Consumer Sentiment registered at 49.8 in April, compared to 53.3 in March, according to the survey. Current Economic Conditions was 52.5 in April, compared to 55.8 in March. The Index of Consumer Expectations registered at 48.1 for April, compared to 51.7 for March, falling below the previous record low of 50 set in June 2022. The University of Michigan’s Index of Consumer Sentiment plummeted from March to April, according to the final results for the month released on April 24.

The university’s Index of Consumer Sentiment registered at 49.8 in April, compared to 53.3 in March, according to the survey. Current Economic Conditions was 52.5 in April, compared to 55.8 in March. The Index of Consumer Expectations registered at 48.1 for April, compared to 51.7 for March, falling below the previous record low of 50 set in June 2022. Current Economic Conditions was 52.2 in April, compared to 55.8 in March. The Index of Consumer Expectations registered at 48.1 for April, compared to 51.7 for March, falling below the previous record low of 50 set in June 2022. “The Iran conflict appears to influence consumer views primarily through shocks to gasoline and potentially other prices. In contrast, military and diplomatic developments that do not lift supply constraints or lower energy prices are unlikely to buoy consumers,” Joanne Hsu, who directs consumer surveys at the University of Michigan, said in a news release. Here’s what Elizabeth Renter, NerdWallet’s senior economist, had to say about the report: Sentiment improved a tiny bit over earlier in the month as consumers held onto the hope of a cease fire and potential resolution. Still, they’re feeling bad, and expected business conditions are about where they were after Liberation Day last year. Gas prices have a direct impact on consumer sentiment, so when the economic shock is an oil shock, a dramatic sentiment effect is par for the course. If this sentiment is then paired with decreased demand from consumers as they reallocate their budgets to pay for sustained higher gas prices, we can see it show up in spending and ultimately GDP data. This is just one way that war and an oil price shock can reverberate through the economy.

New York Fed: Consumers See Higher Near-Term Inflation

The New York Fed’s Survey of Consumer Expectations for April, released on May 7, shows short-term inflation expectations ticked up to 3.6% while medium and longer-term held steady. Gas price growth expectations dropped sharply after a March spike. Labor market sentiment was largely stable, though unemployment concerns hit their highest level since April 2025. Households reported worsening credit access and a dimmer view of their current financial situation, but delinquency fears fell to a two-year low. The New York Fed’s Survey of Consumer Expectations The survey was fielded from April 1 to April 30.

Conference Board: Confidence inches up in April

The Conference Board’s Consumer Confidence Index report for April (released on April 28) ticked up by 0.6 point to 92.8 from an revised index of 92.2 in March. “Consumer confidence edged up in April but was overall little changed, despite material concern about rising gasoline prices as the war in the Middle East prompted a surge in Brent crude oil prices,” said Dana M Peterson, chief economist at The Conference Board, in a release.

The survey period was April 1-22, which included the initial two-week ceasefire in the Middle East. “Consumer confidence edged up in April but was overall little changed, despite material concern about rising gasoline prices as the war in the Middle East prompted a surge in Brent crude oil prices,” said Dana M Peterson, chief economist at The Conference Board, in a release.

The survey period was April 1-22, which included the initial two-week ceasefire in the Middle East. “Consumer confidence edged up in April but was overall little changed, despite material concern about rising gasoline prices as the war in the Middle East prompted a surge in Brent crude oil prices,” said Dana M Peterson, chief economist at The Conference Board, in a release.

The survey period was April 1-22, which included the initial two-week ceasefire in the Middle East. The board’s Present Situation Index — measuring consumers’ current assessment of business and labor market conditions — dipped by 0.3 point to 123.8 in April. The Expectations Index — measuring consumers’ short-term outlook for income, business and labor market conditions — rose by 1.2 points to 72.2. More findings below.

What is consumer sentiment?

Consumer sentiment, also known as consumer confidence, is an index of how U.S. consumers are feeling about the current and future state of the economy, and all that folds into the economy: the job market, wages, business conditions and their personal finances. It’s a valuable tool for economists, as consumer sentiment can be used as an early predictor of economic changes. How people feel about the economy can directly impact the economy, because consumers' attitudes often affect how much they spend on things like food, transportation, household goods, entertainment and more. » Stay informed: Stay informed: Check out NerdWallet's news hub for all the latest. Subscribe to one of NerdWallet's free newsletters. In 2023, consumers’ personal spending made up 67.9% of the U.S. GDP, or gross domestic product, according to the Federal Reserve Bank of St. Louis. That’s a significant majority of the nation’s GDP, so keeping a close eye on consumer sentiment is key in foreseeing potential economic slumps or rallies. When the economy is in a recession, consumer sentiment falls. On the flip side, when the economy is expanding, consumer sentiment rises. The index does typically peak before a recession, though. Unlike other indexes, such as the Consumer Price Index (CPI), consumer sentiment isn’t calculated using spending data or hard figures. Instead, economists rely on two major surveys of consumer confidence: The University of Michigan’s Surveys of Consumers and the Conference Board’s Consumer Confidence Survey. Each survey collects the general attitudes and opinions of hundreds of U.S. consumers. Then, those opinions are assigned numeric values and aggregated into one number, or index.

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What is consumer sentiment like right now?

What is consumer sentiment like right now? The University of Michigan’s Index of Consumer Sentiment The University of Michigan’s Index of Consumer Sentiment The preliminary reading for April from the University of Michigan, released on April 10, shows: The Index of Consumer Sentiment registered at 47.6 for April, down from 53.3 for March. Current Economic Conditions registered at 50.1 for April, down from 55.8 for March. The Index of Consumer Expectations registered at 46.1 for April, down from 51.7 for March. How the University of Michigan creates its index The Index of Consumer Sentiment is one of three indexes derived from the University of Michigan’s Surveys of Consumers, which started in 1946. Originally conducted annually, the surveys switched to a monthly cadence in 1978. The surveys have a sample size of roughly 600 people selected randomly from the 48 adjoining U.S. states and the District of Columbia. The surveys include roughly 50 questions covering personal finances, business conditions and buying conditions. From those surveyed, three indexes are produced: the Index of Consumer Sentiment, the Index of Consumer Expectations and the Index of Current Economic Conditions. The Index of Consumer Sentiment is the most commonly cited index of the bunch. It’s derived from these five questions: "We are interested in how people are getting along financially these days. Would you say that you (and your family living there) are better off or worse off financially than you were a year ago?" "Now, looking ahead: Do you think that a year from now you (and your family living there) will be better off financially, or worse off, or just about the same as now?" "Now, turning to business conditions in the country as a whole. Do you think that during the next twelve months we'll have good times financially, or bad times, or what?" "Looking ahead, which would you say is more likely: that in the country as a whole we'll have continuous good times during the next five years or so, or that we will have periods of widespread unemployment or depression, or what?" "About the big things people buy for their homes, such as furniture, a refrigerator, stove, television, and things like that. Generally speaking, do you think now is a good or bad time for people to buy major household items?" Historically, the surveys have been conducted by phone. Starting in July 2024, they'll be conducted online, with researchers aiming for 900 to 1,000 respondents. The Conference Board’s Consumer Confidence Index The Conference Board’s Consumer Confidence Index Conference Board data for April, released on April 28, shows: The Consumer Confidence Index rose 0.6 point in April to 92.8. The Present Situation Index declined by 0.3 point to 123.8. The Expectations Index rose by 1.2 points to 72.2. How the Conference Board’s Consumer Confidence Index comes together The Conference Board’s Consumer Confidence Survey was launched in 1967 as a mail survey conducted every other month. Today, the survey is conducted online, on a monthly basis, with a sample size of roughly 3,000 respondents. The Conference Board issues a five-question survey to calculate three distinct indexes: the Consumer Confidence Index, the Present Situation Index and the Expectations Index. Once the surveys have been completed, each question is given a relative value. Then, those values are compared against their relative values from 1985 — the survey’s benchmark year, with an index set at 100. The Consumer Confidence Index is the average index for all five questions. The Present Situation Index is calculated using the average indexes for the first two questions, and the remaining three questions determine the Expectations Index. Present Situation Index Present Situation Index Respondents’ appraisal of current business conditions. Respondents’ appraisal of current employment conditions. Expectations Index Expectations Index Respondents’ expectations regarding business conditions six months hence. Respondents’ expectations regarding employment conditions six months hence. Respondents’ expectations regarding their total family income six months hence. Consumer Confidence Index Consumer Confidence Index This is the average index for all five questions above. The Federal Reserve Bank of New York’s Survey of Consumer Expectations The Federal Reserve Bank of New York’s Survey of Consumer Expectations Some highlights for April from the Federal Reserve Bank of New York's Survey of Consumer Expectations, released on May 7: Inflation. Median one-year inflation expectations rose 0.2 percentage point to 3.6%, while medium- and longer-term expectations held steady at 3.1% and 3.0%. Inflation. Gas prices. Year-ahead gas price growth expectations fell sharply by 4.3 percentage points to 5.1% after a March spike. Gas prices. Unemployment expectations. The mean probability that unemployment will be higher a year from now rose to 43.9%, the highest since April 2025. Unemployment expectations. Household spending growth. Median spending growth expectations hit 5.4%, the highest since July 2023, driven by lower-income households. Household spending growth. Credit access. Both current perceptions and future expectations of credit access deteriorated. Credit access. Delinquency. The probability of missing a minimum debt payment fell to 11.4%, a two-year low. Delinquency. Government debt. Expected growth in government debt rose to 10%, the highest since June 2023. Government debt. How the Federal Reserve Bank of New York conducts its survey The Federal Reserve Bank of New York’s Survey of Consumer Expectations focuses on expectations about economic outcomes. The survey, which is conducted by NielsenIQ, launched in 2013. It’s an internet-based survey that asks a rotating panel of 1,300 heads-of-household about their expectations of the economy, as well as their own personal finances related to the following categories: Inflation: Inflation expectations. Inflation uncertainty. Probability of different inflation outcomes. Home price change expectations. Home price change uncertainty. Commodity price change expectations. Labor market: Earnings growth expectations. Earnings growth uncertainty. Job separation expectations. Job finding expectations. Moving expectations. Expectations of higher unemployment. Household finance: Household income growth expectations. Household spending growth expectations. Change in taxes. Change in credit availability. Debt delinquency expectations. Expectations of higher interest rate on savings accounts. Household financial situation.Expectations of higher stock prices. Government debt growth expectations. » MORE: Current rate of inflation and why it matters » MORE:

When do the next consumer sentiment reports come out?

The University of Michigan’s next set of results for its Surveys of Consumers will be released on Friday, May 8. The Conference Board will release its next Consumer Confidence Survey on Tuesday, May 26. The New York Fed will release its next Survey of Consumer Expectations on Thursday, May 7. Explore more on About the author Helhoski Anna Helhoski is a senior writer covering economic news and trends in consumer finance at NerdWallet. She is an on-air contributor and producer of Money News segments for NerdWallet's Smart Money podcast. She is also an authority on student loans. She joined NerdWallet in 2014. Her work has been syndicated in news outlets nationwide including The Associated Press, The New York Times, The Washington Post, The Los Angeles Times and USA Today. She previously covered local news in the New York metro area for the Daily Voice and New York state politics for The Legislative Gazette. She holds a bachelor's degree in journalism from Purchase College, State University of New York. Published in How to Pay Off Debt: Top Strategies for 2026 Credit Score Ranges: What They Mean and How They Work How to Budget Money in 5 Steps 28 Proven Ways to Save Money Get Your Free Credit Score By NerdWallet How to Pay Off Debt: Top Strategies for 2026 By Lauren Schwahn, Jackie Veling 50/30/20 Budget Calculator By Amanda Barroso, Elizabeth Ayoola