The Conference Board said on Tuesday that its consumer confidence index inched up to 92.8 in April from 92.2 in March.
Although the gauge has ticked up over the past two months, it remains near its lowest level since the COVID-19 pandemic.
Respondents’ comments about prices, oil, gas and the war increased in April, as the national average for a gallon of petrol in the US rose to $4.18 this week, up more than a dollar since before the war began. The last time US drivers were collectively paying this much at the pump was nearly four years ago, following the Russian invasion of Ukraine.
The largest monthly jump in petrol prices in six decades led to a sharp spike in inflation last month, posing challenges for policymakers at the Federal Reserve.
Consumer prices rose 3.3% in March from a year earlier, the Labour Department reported earlier this month, up sharply from 2.4% in February and marking the biggest annual increase since May 2024. On a monthly basis, prices rose 0.9% in March from February, the largest such increase in nearly four years.
It is the first inflation reading to capture the effects of the Iran conflict. The surge in petrol prices is expected to stretch the budgets of lower- and middle-income households, making it harder to afford essentials such as food and rent.
“Consumers are singing the blues,” said Heather Long, chief economist at Navy Federal Credit Union. “They aren’t happy with high prices for petrol, housing, electricity and many other items. It’s clear consumers won’t feel much better until there’s an end to the West Asia conflict.”
Government data from earlier this month showed that the inflation gauge closely monitored by the Federal Reserve rose 2.8% in February from a year earlier, signalling that prices were already elevated even before the Iran conflict drove up oil and gas costs.
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These price pressures, along with the prospect of further inflation, make it unlikely that the Federal Reserve will cut its benchmark interest rate when it concludes its two-day meeting on Wednesday.
The Fed cut its benchmark interest rate three times towards the end of 2025 in an effort to support a slowing labour market. However, as lower rates can exacerbate inflation—which remains above the Fed’s 2% target—the central bank has kept rates unchanged at its past two meetings.
In the Conference Board’s report, a measure of Americans’ short-term expectations for income, business conditions and the job market rose 1.2 points to 72.2, but remained well below 80—a level that can signal a potential recession. It marked the 15th consecutive month that the reading has stayed below this threshold.
The index for consumers’ assessment of their current economic situation edged down by 0.3 points to 123.8.
