The University of Michigan’s Consumer Sentiment Index dropped sharply to 53.3 in March 2026, down from a preliminary reading of 55.5 and below February’s level of 56.6. This places sentiment close to the record lows seen at the end of 2025, with declines cutting across all age groups and political affiliations. Confidence fell most steeply among middle- and higher-income households, as well as those with significant stock market exposure.
The downturn largely reflects the impact of rising gasoline prices and heightened financial market volatility, both intensified by the ongoing conflict involving Iran. Short-term views on the economy deteriorated significantly, with the near-term economic outlook plunging 14%, and expectations for personal finances over the next year dropping 10%. In contrast, longer-term expectations weakened only slightly, suggesting that consumers do not necessarily expect current pressures to endure.
Year-ahead inflation expectations climbed to 3.8%, marking the largest monthly increase since April 2025, while long-term inflation expectations edged down to 3.2%.
