Consumer sentiment in the U.S. has plummeted to its lowest level since 1978, driven by economic uncertainties stemming from the Iran war.
| PULSE POINTS |
❓ WHAT HAPPENED: Consumer sentiment crashed to a record low of 49.8 in April, according to the University of Michigan’s Consumer Sentiment Index. This marks the lowest level since data collection began in 1978. 📰 DETAIL: The University of Michigan’s Consumer Sentiment Index is a consumer confidence report published monthly by the university’s Institute for Social Research. The index incorporates data gathered through questions about individual economic circumstances, as well as short- and long-term economic expectations. In the most recent survey, published on Friday, the Index revealed that consumer confidence has dropped to just 49.8, the lowest since data collection began back in 1978 and down from 53.3 in March. The drop in consumer sentiment is attributed to rising fuel costs and inflationary pressures created by the ongoing war with Iran. Concern has endured despite the declaration of an extended ceasefire between the U.S. and the Islamic Republic. The Index further indicated that consumers expect a significant price rises in future, with gas prices anticipated to rise by almost 50 cents over the next year, and that compared with March, consumer predictions of inflation in a year’s time spiked to 4.7 percent. Growing economic pessimism cuts across political party, education, age, and socioeconomic lines, showing genuine, widespread concern. 💬 KEY QUOTE: “The Iran conflict appears to influence consumer views primarily through shocks to gasoline and potentially other prices. Military and diplomatic developments that do not lift supply constraints or lower energy prices are unlikely to buoy consumers.” — Survey director Joanne Hsu 🎯 IMPACT: There is substantial evidence that the Iran war is creating economic uncertainty. The ongoing conflict has caused significant disruption to the airline industry and a spike in fertilizer costs, impacting already strained American farmers. |
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