Consumer sentiment fell for the third straight month as supply disruptions in the Strait of Hormuz continue to lift gasoline prices, according to the University of Michigan Surveys of Consumers.
Sentiment is now just below the previous historical trough seen in June 2022. The cost of living continues to be a first-order concern, with 57% of consumers spontaneously mentioning that high prices were eroding their personal finances, up from 50% last month.
Independents and Republicans saw decreases in sentiment, with both groups reaching their lowest readings of the current presidential administration. Meanwhile, sentiment of Democrats was little changed from last month.
"Earlier this year consumers may have reserved judgment about how long the Iran conflict would last," said U-M economist Joanne Hsu, director of the surveys. "Three months into the conflict, consumers appear to be worried that supply disruptions are unlikely to be resolved quickly. Moreover, consumers are clearly concerned that increases in gas prices will spread to other prices in the economy and that consequences may persist into the long run."
Gas prices drive deterioration in personal finances
Current personal finances plunged about 13% in May. Lower-income consumers and those without college degrees posted particularly strong declines in personal finances as well as overall sentiment this month.
These groups are all more sensitive to increases in the cost of gas, which has risen sharply by more than 50% since the start of the Iran conflict, Hsu said.
During interviews this month, nearly 40% of consumers offered unsolicited comments about gas prices, up from 33% last month, reflecting their importance in how consumers view the economy.
Expected business conditions weaken
Consumers anticipate that business conditions will worsen over both short- and long-term horizons. Year-ahead expected business conditions fell 6% this month and are now almost 30% below January 2026. Similarly, long-run expectations declined 8%, down about 18% from the start of the year.
Consumers cite a variety of pressures on businesses, including recent factors like rising costs and the Iran conflict, as well as ongoing factors like tariffs and uncertainty, according to Hsu.
Consumer Sentiment Index
The Consumer Sentiment Index fell to 44.8 in the May 2026 survey, down from 49.8 in April and below last May's 52.2. The Current Index fell to 45.8, down from 52.5 in April and below last May's 58.9. The Expectations Index fell to 44.1, down from 48.1 in April and below last May's 47.9. Interviews for this release were completed between April 21 and May 18.
About the surveys
The Surveys of Consumers is a rotating panel survey at the University of Michigan Institute for Social Research. It is based on a nationally representative sample that gives each household in the coterminous U.S. an equal probability of being selected. Interviews are conducted throughout the month by web. The minimum monthly change required for significance at the 95% level in the Sentiment Index is 4.8 points; for the Current Economic Conditions Index and Index of Consumer Expectations, the minimum is 6 points.
About ISR
Established in 1949, the Institute for Social Research at the University of Michigan is among the world's oldest social science research organizations and a world leader in the development and application of social science methodology. ISR conducts some of the most widely cited surveys and studies in the nation, including the University of Michigan Surveys of Consumers, American National Election Studies, Monitoring the Future Study, Panel Study of Income Dynamics, Health and Retirement Study, National Survey of Black Americans and World Values Survey. ISR is also home to the Inter-University Consortium for Political and Social Research, which maintains the world's largest computerized social science data archive.
