US Consumer Sentiment Falls To Record Low On Gas Prices

Catenaa, Friday, May 22, 2026- US consumer sentiment fell to a record low in May, underscoring that higher gas prices and rising costs from the US-Iran war continued to weigh on Americans’ views of the economy.

The University of Michigan’s Index of Consumer Sentiment showed consumer sentiment declined to 44.8 for the month of May, marking the lowest level on record. 

Sentiment fell further from April’s final reading of 49.8 and was “just below the previous historical trough seen in June 2022,” Joanne Hsu, the survey’s director, said in the release.

Americans are feeling worse about the economy now than they were during the COVID-19 pandemic, the financial crisis, and following the 9/11 attacks.

Overall, consumer sentiment fell 10% from last month and 13.2% from a year ago, as rising cost pressures and fuel prices weighed on consumers.

Hsu said lower-income consumers and those without college degrees “posted particularly strong sentiment declines,” given that “these groups are more sensitive to increases in the cost of gas and other essentials.”

Gas prices have increased by more than $1.50 on average since the beginning of the war in the Middle East, according to AAA, and are now creeping toward $5 per gallon nationwide. 

Prices in all states have surpassed $4 per gallon of gas on average, and in California, average prices are already above $6 per gallon.

According to GasBuddy’s Patrick De Haan, “Americans will be spending $2 billion more on gasoline over the four-day Memorial Day weekend compared to a year ago.”

Friday’s reading from the University of Michigan also showed year-ahead inflation forecasts rose to 4.8% this month, compared with 4.7% in April and a preliminary reading earlier this month of 4.5%.

“Consumers appear worried that inflation will increase and proliferate beyond fuel prices, even in the long run,” Hsu said.

Many are warning about the ripple effect of higher fuel costs. Walmart’s CFO, John David Rainey, said this week that the retailer is starting to see impacts on input, packaging, and transportation costs.

Long-term inflation expectations rose to 3.9% in May, up from 3.5% in April and the highest level since October 2025.

In recent months, long-term inflation expectations have remained consistently higher than the levels around 2.8% seen in 2019 and 2020, and well above the 2.8% to 3.2% range seen in 2024.