U.S. consumer confidence rises slightly in April amid high gas prices and Iran conflict
U.S. consumer confidence increased modestly in April, despite concerns over rising energy prices linked to the war in Iran, The Conference Board reported Tuesday.
The consumer confidence index ticked up to 92.8 in April from 92.2 in March. However, the measure remains near its lowest point since the COVID-19 pandemic, reflecting ongoing economic uncertainty. Respondents expressed increased worries about prices, oil, gas, and the conflict abroad.
The national average for a gallon of gasoline rose to $4.18 this week, the highest since early 2020, when Russia invaded Ukraine. The surge in fuel costs has contributed to a sharp rise in inflation, with consumer prices climbing 3.3% in March from the previous year, the Labor Department reported earlier this month. This marks the largest annual increase since May 2024 and a significant acceleration from February’s 2.4% rise.
The rising energy prices are expected to strain household budgets, especially for lower- and middle-income families, as they face higher costs for essentials like food and rent. Heather Long, chief economist at Navy Federal Credit Union, said consumers are feeling the impact of high prices across multiple sectors, adding that optimism may only return once the conflict in the Middle East subsides.
Earlier government data showed that inflation measures were already elevated before the Iran conflict, with prices rising 2.8% year-over-year in February. The prospect of further inflationary pressures due to the ongoing war makes it unlikely the Federal Reserve will cut interest rates at its upcoming meeting. The Fed has maintained steady rates in recent months to combat persistent inflation, which remains above its 2% target.
The Conference Board also reported that Americans’ short-term outlook for income, business conditions, and employment rose slightly to 72.2 but remains below the 80 threshold associated with recession signals. Meanwhile, consumers’ assessments of the current economic situation dipped slightly to 123.8. The report indicates ongoing economic challenges amid geopolitical tensions and rising inflation.
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