Employers kept hiring through the Iran war's energy shock, but Americans were left staring at a new record low in consumer sentiment as gasoline prices stayed elevated and tariffs kept biting into daily life. The University of Michigan's latest consumer survey, released Friday, showed sentiment fell early this month to a preliminary reading of 48.2, the lowest on records going back to 1952.
Who Pays for the Shock
Joanne Hsu, the survey's director, said, "About one-third of consumers spontaneously mentioned gasoline prices and about 30% mentioned tariffs." She added, "Taken together, consumers continue to feel buffeted by cost pressures, led by soaring prices at the pump." That is the plain language of the squeeze: people at the bottom of the economy are being hit from multiple directions while the machinery above them keeps moving.
Hsu also said, "Middle East developments are unlikely to meaningfully boost sentiment until supply disruptions have been fully resolved and energy prices fall." The statement ties consumer mood not to some abstract confidence problem, but to the material reality of supply disruptions and prices that ordinary people cannot control.
Gas prices have remained elevated, with the national average price for a gallon of gasoline stuck above $4 for weeks. Global energy prices have stayed high as well, with the ongoing closure of the Strait of Hormuz, a key global passageway through which 20% of the world's oil passes, along with various other commodities. The costs of that closure are not evenly distributed; they land in paychecks, shopping carts and household budgets.
What the Numbers Say
The survey's measure of Current Economic Conditions plunged 9% in early May to a reading of 47.8, owing to a surge in concerns about high prices both for personal finances as well as buying conditions for major purchases, according to a release. That drop shows how quickly the official language of recovery can collapse when prices keep climbing and people are forced to delay or rethink what they buy.
Oren Klachkin, financial market economist at Nationwide, said, "In sharp contrast to investors, consumers feel miserable right now." He added, "It's hard to see a path for sentiment to rebound at least until gasoline prices start coming down on a sustained basis." The contrast is doing a lot of work here: those with capital can watch the numbers, while those who actually have to live inside them absorb the pain.
Whirlpool, a major appliances producer, missed analysts' estimates in first-quarter earnings reported earlier this week, and its stock fell as much as 20% after the report. Whirlpool CFO Roxanne Warner said demand for appliances has "reached recession-level lows," pointing to low sentiment as a major reason why. She said, "The industry contracted about 7.4%." Warner added, "These are levels that last time you've seen was in the great financial crisis."
The Labor Market Keeps the Machine Running
New employment data on Friday showed that the unemployment rate held steady at 4.3% in April as employers added a stronger-than-expected 115,000 jobs that month. The hiring kept going even as the energy shock and price pressures spread through the economy, showing how workers are expected to keep the system functioning while the system itself keeps making life more expensive.
While Americans continue to hold on to the jobs that allow them to spend, they are still likely modifying their purchasing behavior, especially with higher gas prices eating a bigger share of people's paychecks and Trump's tariffs making certain goods more expensive. That is the hierarchy in motion: wages remain tied to survival, while the costs imposed from above keep climbing.
The survey released Friday captures a public being squeezed by war-linked energy disruption, tariffs and stubbornly high gasoline prices. The official numbers may still show hiring and a steady unemployment rate, but the consumer side of the ledger tells a harsher story, one where ordinary people are left to absorb the shock while institutions and markets keep narrating stability.