U.S. consumer confidence rose slightly in April, with the Conference Board’s index ticking up to 92.8 from 92.2 in March. However, the reading remains near its lowest level since the COVID-19 pandemic, as American households grapple with soaring energy prices fueled by the ongoing conflict in Iran.
The national average for a gallon of gas reached $4.18 this week, marking a more than $1 increase since the war began and the highest level since Russia’s invasion of Ukraine in 2022. This surge has contributed to a sharp rise in inflation, with consumer prices climbing 3.3% in March year-over-year, the largest increase since May 2024. On a monthly basis, prices rose 0.9% in March, the steepest jump in nearly four years.
Consumers aren’t happy with high prices for gas, housing, electricity, and many other items. It’s clear consumers aren’t going to feel much better until there’s an end to the Middle East conflict.
The spike in energy costs is disproportionately impacting lower- and middle-income households, straining budgets for essentials like food and rent. Despite modest gains in consumer sentiment, short-term expectations for income, business conditions, and the job market remain concerning, with the Conference Board’s measure staying below the 80-point threshold that often signals an impending recession.
With inflation persistently above the Federal Reserve’s 2% target and energy prices continuing to rise, the central bank is unlikely to cut interest rates during its upcoming meeting. This poses additional challenges for American workers already facing economic pressures exacerbated by global instability.