Consumer confidence in the United States has plunged to the lowest level ever recorded in more than 70 years of tracking, according to the University of Michigan’s latest index released Friday.
The sharp decline comes as Americans grapple with persistently high prices, a softening labor market, and rising energy costs triggered by the Iran war that began at the end of February. The reading fell 10% below the previous record low set in June 2022, when inflation was at its highest level in decades.
“Prices remain extremely high, labor markets have unambiguously weakened in the last four years, and now we’re in the middle of a war,” said Joanne Hsu, director of consumer surveys at the University of Michigan.
“I don’t think the fact that we’re lower than June 2022 should come as a surprise to anyone.” Sentiment was already weak entering 2026 but deteriorated rapidly after the conflict drove gas prices sharply higher. The new low underscores growing economic anxiety among ordinary Americans despite other positive signals in the broader economy.
Financial markets told a very different story on the same day. The S&P 500 posted its eighth straight week of gains, while the Dow Jones Industrial Average closed at a record high for the second consecutive session.
The divergence highlights a split in American experiences: those with substantial stock portfolios report feeling somewhat better than the national average, according to the Michigan survey. However, even these higher-income investors remain relatively unhappy compared with similar periods of strong market performance in the past.This marks a notable shift from historical patterns, where booming stock valuations typically lifted broader consumer sentiment more significantly. The current malaise suggests that everyday pressures — particularly at the gas pump and grocery store — are outweighing paper gains in retirement accounts for many households.
The University of Michigan’s consumer sentiment index, one of the longest-running measures of its kind, reflects Americans’ views on current economic conditions and their expectations for the future. Friday’s reading represents the latest sign that geopolitical shocks and lingering inflation scars continue to weigh heavily on public mood, even as Wall Street celebrates new highs.