WASHINGTON, April 24 (Xinhua) -- U.S. consumer sentiment for April took a nosedive as the U.S.-Israeli war with Iran showed no signs of ending.
The consumer sentiment index fell 3.5 points from the previous month to 49.8, comparable to the trough seen in June 2022, according to Friday's widely watched monthly report from the University of Michigan.
Decreases in sentiment were seen across political parties, income, age and education. Expected business conditions declined for both short and long-time horizons, nearly matching year-ago readings when reciprocal tariffs weighed on outlooks, the report found.
The Iran conflict appears to influence consumer views primarily through shocks to gasoline and potentially other prices, the report said.
"Sentiment is likely to remain weak at least until the Iran war is resolved," Dean Baker, co-founder of the Center for Economic and Policy Research, told Xinhua. "Gas prices will remain high, if not go higher. Airlines are cutting back flights and raising prices, just as people are planning their summer vacations."
Other economists echoed the view that energy prices may remain stubbornly high even after hostilities subside.
Gary Hufbauer, a nonresident senior fellow at the Peterson Institute for International Economics, told Xinhua, "The problem is that oil is likely to stay around 90 (U.S. dollars) a barrel to 100 (U.S. dollars) a barrel once the war ends."
"The end of the war will be a boost, but everything will not unwind immediately. We will be very lucky if (gas) prices get back, or close, to their pre-war level by the end of the year. Even in a best-case scenario, prices will be seriously elevated for several more months," said Baker.
The Friday report found that year-ahead inflation expectations surged from 3.8 percent in March to 4.7 percent this month, the largest one-month increase since April 2025.
The current reading exceeds those seen in 2024 and remains well above the 2.3 percent to 3.0 percent range seen in the two years pre-pandemic. After hovering between 3.2 percent and 3.3 percent for the previous four months, long-run inflation expectations climbed to 3.5 percent in April, the highest reading since October 2025, the report found.
Expectations are likely to improve after consumers are convinced that problems due to the Iran war have subsided and the price of gas has moderated, it added.
The report came on the heels of the Bureau of Labor Statistics report that found the consumer price index rose 0.9 percent in March.
The weakening outlook comes amid a prolonged standoff. The U.S. naval blockade of Iran's ports and ships is set to continue for "as long as it takes" to get Tehran to cut a deal, Defense Secretary Pete Hegseth said Friday.
Meanwhile, Iran has said that lifting the blockade is required before Iran's officials resume peace negotiations with the United States. ■