American consumers are not reading the stock rally the same way Wall Street is. The University of Michigan's preliminary April sentiment index fell to 47.6, an 11% drop from March and the lowest reading in the survey's history, as households reacted to higher fuel prices and anxiety over the Iran war.
The detail was bleak. Assessments of personal finances weakened, buying conditions for durable goods and vehicles deteriorated, and inflation fears rose. Survey director Joanne Hsu noted that many open-ended comments blamed the Iran conflict for unfavorable economic changes.
Markets Rally, Households Retreat
The split screen is striking. Equities have bounced on ceasefire hopes and AI earnings strength, while consumers are telling pollsters that the economy feels worse than it did during prior crisis points. Gasoline prices are visible, frequent and psychologically powerful, making the oil shock especially damaging to confidence.
Because most responses were collected before the temporary ceasefire announcement, sentiment could rebound if fuel prices retreat. But the record-low reading is already a warning for retailers, automakers and politicians: households may not spend like the market expects if inflation fear stays this loud.