American consumers haven’t been this pessimistic since the University of Michigan started asking them how they feel. Which was in the 1950s.
The university’s Index of Consumer Sentiment cratered to 44.8 in the final May 2026 reading, a 10% drop from April’s already grim 49.8. That April figure had itself broken the previous all-time low of 50.0, set during June 2022’s inflation spike. So we’ve now blown through the floor twice in two months.
What’s driving the collapse
Gasoline prices, mostly. Ongoing supply disruptions in the Strait of Hormuz have sent fuel costs surging, and consumers are feeling it every time they fill up. A full 57% of survey respondents pointed to high prices for essentials as a major drag on their financial well-being.
The pain is showing up in inflation expectations too. One-year inflation outlooks ticked up to 4.8% from 4.7%, which on its own looks like a rounding error. But the longer-term picture is more alarming: five-year inflation expectations jumped to 3.9% from 3.5%. In English: consumers don’t just think prices are bad right now. They’re starting to believe prices will stay bad for years.
