US consumer confidence crashes to historic low amid soaring prices and Iran war fallout
American consumer confidence has plunged to a historic low in May. The University of Michigan’s Consumer Sentiment Index fell sharply to 44.8, marking the weakest reading of Trump’s second term. Rising prices and economic frustration have left households increasingly worried about their financial future. The steep decline in confidence was fuelled by soaring gasoline costs tied to the Iran conflict. Since the war began, the national average price at the pump has surged over 50%, reaching about $4.552 per gallon. This spike has hit household budgets hard, with 57% of consumers reporting that high prices are cutting into their personal finances.
Inflation concerns have also deepened. Expectations for price rises over the next year climbed to 4.8%, while the five-year outlook jumped to 3.9%. The pressure follows April’s inflation surge—the fastest in three years—which has left many struggling to afford everyday essentials. Sentiment among Republicans and Independents has hit its lowest point since Trump took office for a second term. Anger over the cost of living has spread widely, with consumers blaming high expenses for basics like food, fuel, and housing.
The record-low sentiment reflects growing economic strain across the country. With inflation expectations rising and fuel prices at painful levels, households face tighter budgets and greater uncertainty. The data underscores how sharply the conflict in Iran and domestic price hikes have reshaped consumer outlook.
