Consumer confidence in the US has dropped to an all-time low. The University of Michigan’s Consumer Sentiment Index hit 44.8 in the final May 2026 reading - the lowest figure ever recorded in the survey’s history.
The final number fell 3.4 points below the preliminary estimate of 48.2, extending a decline of three consecutive months. April’s reading was 49.8.
Inflation is the primary culprit, driven by the escalated US-Iran conflict disrupting oil flows through the Strait of Hormuz, sending gasoline prices higher. 57% of consumers cited high prices as their main source of financial stress.
One-year inflation expectations ticked up to 4.8%. Long-run expectations jumped to 3.9% from 3.5%.
Lower-income households and those without college degrees are hit hardest. Gasoline and groceries consume a larger share of their spending.
Retailers are reporting war-related inflation is affecting store supplies.
Consumer spending accounts for roughly two-thirds of US economic activity.
Bitcoin did not crash on the news, continuing to be classified as a risk asset. The jump in long-run inflation expectations may, however, revive the narrative of Bitcoin as an inflation hedge.
Traders are watching the June Michigan preliminary reading and upcoming consumer spending data closely.