U.S. consumer confidence rose modestly in April to 92.8 from 92.2 in March, but the numbers sit near their lowest level since the COVID-19 pandemic while soaring energy prices and war-driven inflation keep squeezing ordinary people. The Conference Board said Tuesday that the index inched up even as respondents grew more anxious about prices, oil, gas and the war in Iran, a reminder that the machinery of the economy keeps shifting costs downward onto households while institutions at the top debate what to do next.
Who Pays for the War Economy
The national average for a gallon of gas in the U.S. rose to $4.18 this week, up more than a dollar since before the war began. The last time U.S. drivers were collectively paying this much at the pump was nearly four years ago, following Russia's invasion of Ukraine. The largest monthly jump in gas prices in six decades caused a sharp spike in inflation last month, creating challenges for the inflation-fighters at the Federal Reserve.
Consumer prices rose 3.3% in March from a year earlier, up from 2.4% in February and the biggest yearly increase since May 2024. On a monthly basis, prices rose 0.9% in March from February, the largest such increase in nearly four years. It was the first read on inflation to capture the effects of the Iran war. The surge in gas prices will stretch the budgets of lower- and middle-income households as it erodes their incomes, making it harder to afford other necessities such as food and rent.
Heather Long, chief economist at Navy Federal Credit Union, said, “Consumers are singing the blues. They 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 Apparatus Calls It Stability
Government data from earlier this month showed that the inflation gauge closely monitored by the Federal Reserve moved 2.8% higher in February from a year ago, a sign that prices were persistently elevated even before the Iran war caused spikes in oil and gas costs. Those higher prices and the prospect of even higher inflation due to the Iran war make it unlikely that the Federal Reserve will cut its benchmark interest rate when it wraps up its two-day meeting on Wednesday.
That is how the system manages crisis from above: households absorb the shock, while the Federal Reserve weighs whether to keep interest rates where they are. The people facing higher gas, food and rent costs do not get to vote on the price of fuel or the rate-setting decisions that shape borrowing costs; they simply live with the consequences.
Confidence, But Only in the Narrowest Sense
In the Conference Board's report Tuesday, a measure of Americans' short-term expectations for their income, business conditions and the job market rose 1.2 points to 72.2, but remained well below 80, a marker that can signal a recession ahead. It was the 15th consecutive month that reading came in under 80. The index for consumers' assessments of their current economic situation fell by 0.3 points to 123.8.
The improvement in sentiment was also linked in one report to a better-perceived labor market and job outlook, while another report said the mood was helped by a ceasefire-related optimism that boosted stock prices. Another report said the confidence rise came despite high gasoline prices and ongoing conflict with Iran.
The numbers sketch a familiar split: stock prices can get a lift from ceasefire optimism while lower- and middle-income households are left to juggle fuel, housing, electricity, food and rent. The Conference Board's reading may have ticked up, but the underlying conditions remain shaped by war, inflation and the decisions of institutions far removed from the people paying at the pump.
What the Numbers Say About Power
The consumer confidence gauge has ticked up for the past two months, but the reading remains near its lowest level since the COVID-19 pandemic. Respondents' comments about prices, oil, gas and the war increased in April as the national average for gas climbed. The economic pain is landing hardest on lower- and middle-income households, while the Federal Reserve prepares to finish its two-day meeting on Wednesday with no clear sign of relief.
The Conference Board's report, the government inflation data and the comments from Heather Long all point to the same hierarchy: war raises costs, prices climb, households absorb the damage, and the institutions at the top describe the fallout as a problem to be managed.