Consumer Confidence Plunges to 2022 Lows as Iran War Drives Up Gas Prices
Michigan residents express deepest economic pessimism since 2022 as Iran War disrupts shipping and drives fuel costs higher statewide.
ANN ARBOR, MICHIGAN — Consumer confidence across Michigan has dropped to its lowest levels in nearly four years, with residents expressing growing concerns about high gas prices and poor buying conditions stemming from the ongoing Iran War, according to new data released by the University of Michigan Surveys of Consumers.
The consumer sentiment index plummeted for the second consecutive month in April 2026, reaching levels comparable to June 2022, which marked the lowest point the index had seen in decades. The decline has affected consumers across all demographic lines, including income, age, education, and political affiliation.
Iran Conflict Driving Economic Concerns
“The Iran conflict appears to be passing through to consumer views primarily through effects on prices, particularly gas and energy prices stemming from disruptions to shipping,” said Joanne Hsu, University of Michigan economist and director of the surveys, in a press release. “At this time, consumers do not foresee relief from high prices in the near future. In fact, consumers expect them to worsen before they improve.”
The survey found that 22 percent of respondents reported weakening incomes over the past month, contributing to deteriorating personal financial outlooks. High gasoline costs emerged as a dominant concern among participants, with many citing fuel prices as a primary negative factor affecting their economic well-being.
Brief Ceasefire Provides Limited Relief
Consumer sentiment showed a slight uptick following the announcement of a two-week ceasefire between the United States and Iran in mid-April, which coincided with marginal decreases in gas prices. However, the improvement proved temporary as underlying economic pressures persisted.
“High price reasons dominate consumers’ thinking, along with recent increases in consumers mentioning costs of gasoline as a negative factor,” Hsu explained. “Interest rate concerns are also prominent, though little changed from previous months.”
Financial Outlook Deteriorates
The combination of elevated prices and declining incomes has significantly impacted how Michigan residents view their financial future. Only 21 percent of consumers now expect to be financially better off one year from now, representing a sharp decline from the 33 percent who expressed optimism in January 2025.
Personal finances worsened for many respondents throughout April, as high prices across multiple categories continued to strain household budgets. The survey indicates that consumers remain pessimistic about when economic conditions might improve, with many anticipating further deterioration before any recovery begins.
The University of Michigan Surveys of Consumers has tracked consumer sentiment for decades, serving as a key indicator of economic confidence and spending patterns among American households. The current readings suggest that the Iran War’s economic impacts are being felt broadly across Michigan’s diverse population, transcending traditional demographic and political divisions.
