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Conflict in the Middle East has pushed inflation higher in the United States and dragged consumer confidence down to a record low in April. A survey released on April 10 by the University of Michigan showed the index of US consumer sentiment at 47.6 in April, a record low and down more than 10% from March.
The survey found that many consumers blamed the Iran conflict for adverse changes to the economy, including faster inflation, according to Joanne Hsu, who oversees the report. The report said all age groups, income levels, and political views recorded lower confidence, reflecting the magnitude of the decline.
Inflation expectations also surged. On average, participants forecast prices to rise 4.8% over the next year—the strongest since August 2025.
Consumption accounts for about two-thirds of US GDP. If households cut back on spending, pressure could weigh on businesses, dragging growth and potentially increasing recession risk. In February, before the Middle East conflict erupted, consumption in the US remained fairly strong, according to US Commerce Department data.
Hsu noted the survey was conducted before April 7, meaning most respondents’ views reflected conditions from the prior month. April 7 was the day the US and Iran announced a two-week ceasefire, with the two countries set to resume talks in Pakistan to reconcile the conflict.
“Economic prospects could improve once consumers are confident that supply disruptions from the conflict have ended and gasoline prices have stabilized,” Hsu said.
The survey was released just before the Labor Department reported that the CPI rose 3.3% in March—the highest in nearly two years. Much of the increase was driven by energy prices, while food prices were almost unchanged.
Heather Long, chief economist at Navy Federal Credit Union, said on April 10: “Gasoline, diesel, and airfares are rising sharply, squeezing household incomes in the US. This is only the beginning.”

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