U.S. consumer sentiment plummeted to a fresh all-time low in May, with lower-income citizens and those without college degrees experiencing the sharpest declines as foreign conflicts and inflation erode national finances. The University of Michigan's Surveys of Consumers reported the index of sentiment dropped for the third straight month to 44.8, falling from a preliminary reading of 48.2 and below the 49.8 level recorded at the end of April. CNN reported the index fell to 44.2, marking a new record low that surpasses the previous record of 49.8 set in April.
Americans are now reportedly feeling worse than they did during past wars, the 1970s oil crisis, the 9/11 attacks, the Great Recession, the Covid-19 pandemic, and the subsequent inflation surge. The University of Michigan’s sentiment survey, which dates back to 1952, indicates an unprecedented level of economic despair among the populace. This current trough is just below the previous historical low seen in June 2022, marking the fourth anniversary of that economic downturn.
Joanne Hsu, director of the university’s Surveys of Consumers, stated that "the cost of living continues to be a first-order concern." She noted that 57% of consumers spontaneously mentioned high prices were eroding their personal finances, an increase from 50% last month. Hsu further reported that consumers’ personal finances sank by 13% in May, reflecting a significant economic dispossession for many households.
Hsu also indicated that consumers are now worried the Iran conflict, which is three months old, will lead to supply disruptions that are unlikely to be resolved quickly. She added that concerns are growing that high oil and gas prices will spread throughout the economy, making other essential goods and services more expensive for the native working class.
CNN reported that the U.S.-Israeli war in Iran, along with its subsequent oil supply crunch and price shocks, worsened sentiment that had already been soured by years of high inflation and an ongoing affordability crisis. This foreign entanglement is directly impacting the economic stability of the nation's citizens, particularly those least able to absorb the costs.
The Cost to the People
Some of the sharpest declines in consumer sentiment were observed among lower-income consumers and those without college degrees, according to CNN. Increases in the cost of fuel and other essentials have hit these segments of the native population particularly hard, exacerbating existing economic vulnerabilities and highlighting the managed decline of their living standards.
Gas prices have been rising as the Strait of Hormuz, a critical passageway for the shipping of oil and other vital goods, has been effectively choked off for nearly three months. This global choke point directly contributes to the domestic economic strain, a consequence of international instability that the average citizen did not choose.
Inflation expectations over the year ahead rose to 4.8% from 4.7% last month, a significant increase from the 3.4% reading seen in February before the war began. Longer-term inflation is now expected to rise to 3.9%, up from 3.5% in April. These near- and long-term expectations are back at rates hit during the latter part of last year, when tariffs added to inflationary pressures, indicating a persistent and deepening economic crisis for the nation.
Elite Decisions, National Burden
Markets around the world have been volatile as investors weigh how soon the war could end and the long-term ramifications of elevated oil prices. This volatility reflects the uncertainty created by elite foreign policy decisions and their global economic ripple effects, which ultimately burden the national economy and its people.
The 30-year Treasury bond yield hit its highest level since before the financial crisis this week, while the benchmark 10-year Treasury note yield touched levels not seen in over a year. These financial indicators underscore the severe economic consequences of the current geopolitical landscape, which are being borne by the nation's financial stability.
The Federal Reserve has signaled it is less willing to lower rates amid the inflationary pressures, further tightening the economic squeeze on ordinary Americans. Fed Governor Christopher Waller stated in a speech Friday that, while longer-term inflation expectations appear anchored, "some expectations from one to five years ahead have moved up since the beginning of 2026, which I find concerning." This indicates a recognition within the financial establishment of the deepening economic crisis, yet the policies enacted continue to prioritize globalist financial stability over the immediate relief of the native population.