Consumer sentiment in the U.S. has fallen to its lowest level on record, underscoring continued pressure on households from elevated prices, geopolitical instability and prolonged economic uncertainty.
The University of Michigan Surveys of Consumers showed that its preliminary May reading dropped to 48.2, marking the weakest level in data going back to 1952 and extending a multi-year decline in household confidence. The current conditions index also weakened as consumers reported worsening perceptions of buying conditions and personal finances.
The survey's director, Joanne Hsu, said responses continue to reflect widespread concern about persistent price pressures, particularly for essentials such as fuel and food. She noted that roughly one-third of respondents cited gasoline prices and about 30% mentioned tariffs as key factors shaping their outlook.
Economists say the prolonged weakness in confidence reflects the cumulative effect of inflation since 2020 along with repeated shocks that have disrupted household planning. These include the pandemic, energy market volatility and ongoing geopolitical tensions affecting global supply chains and oil prices.
Energy markets have remained a central pressure point. Rising crude oil prices linked to instability in the Middle East, including the ongoing conflict involving Iran, have pushed fuel costs higher in recent months, feeding directly into transportation and goods pricing. In several regions, gasoline prices have surged past levels that historically trigger changes in household spending behavior.
Recent reporting from AP News noted that U.S. jobless claims have remained relatively low even as economic uncertainty increases, with economists describing a "low-hire, low-fire" labor market. The report also highlighted that energy-driven inflation tied to geopolitical conflict has contributed to rising cost pressures across the economy.
At the same time, inflation data continues to show uneven progress toward stabilization. A recent analysis from Axios reported that producer-level inflation has accelerated again, with energy costs playing a significant role in renewed price increases across multiple sectors, not just fuel.
The disconnect between sentiment and actual spending behavior remains a defining feature of the current economic cycle. While confidence surveys are near historic lows, consumer spending has continued to support overall growth, particularly in services such as travel, entertainment, and digital platforms.
Corporate earnings reports have reflected this split. Some consumer-facing companies have signaled stronger-than-expected demand, even as others report strain in lower-income segments where higher food, housing, and fuel costs have reduced discretionary spending.
Broader market indicators also show divergence from household sentiment. The S&P 500 has reached record highs in recent months even as consumer confidence continues to decline, reflecting strong corporate earnings and investor expectations tied to technology and large-cap stocks, the CNBC report said.
