With the war in the Middle East continuing to force oil prices up and creating havoc in the financial market. U.S. consumer sentiment has dropped to its lowest level in three months.
A survey released last week by the University of Michigan showed consumers are concerned about the prospects for the American economy in the wake of the war.
U-M’s Surveys of Consumers said its Consumer Sentiment Index dropped to a final reading of 53.3 this month, according to a report from Reuters. It’s the lowest reading since December, from 55.5 earlier. Economists polled by Reuters had forecast the index easing to 54.0. It was at 56.6 in February.
“Consumers with middle and higher incomes and stock wealth, buffeted by both escalating gas prices and volatile financial markets in the wake of the Iran conflict, exhibited particularly large drops in sentiment,” Joanne Hsu, the director of the Surveys of Consumers, told the outlet.
Oil prices have risen by more than 30% since the U.S. and Israel launched attacks against Iran at the end of February.
Retail gasoline prices have now jumped more than $1 to more than $4 per gallon, data from motorist advocacy group AAA showed. Surging oil prices have also sparked a stock market selloff, which economists warned would undermine consumer spending.
The survey’s measure of consumer expectations for inflation over the next year jumped to 3.8% this month from 3.4% earlier and in February. Consumers’ expectations for inflation over the next five years slipped to 3.2% from 3.3% last month, Reuters reported.
