A University of Michigan survey has found that Americans have never felt worse about the economy.
The U of M Surveys of Consumers' May 2026 index of consumer sentiment dipped to a record low in its third consecutive month of decline.
Consumer sentiment measures how optimistic or pessimistic people feel about their personal finances and the broader economy.
According to Director Joanne Hsu, nearly 40% of people interviewed for the May survey mentioned gas prices when asked about their personal finances.
The U.S. military campaign in Iran has caused supply disruptions in the Strait of Hormuz. The Strait is vital for oil and natural gas shipping. Hsu said people primarily experience geopolitical situations like the conflict in the Middle East through their impacts on the prices of everyday items.
“What happens in the Middle East will really primarily move the needle on how consumers' feel about the economy via its effect on gas prices,” Hsu said. “Let's say there is a peace agreement in the Middle East, but the Strait of Hormuz does not open and gas prices remain high. I think it's unlikely that sentiment is going to recover.”
The surveys also collect demographic data about responders. According to Hsu, in general, “if your party is in the White House, you tend to see the economy more favorably than if your party is not in the White House.”
However, May’s decrease in consumer sentiment was primarily driven by Republicans and Independents, with sentiment among Democrats holding steady.
“We have people from across the political spectrum telling us how frustrated they are by the persistence of high prices, and how that's kind of feeding into their worries about the future of the economy,” Hsu said.
The surveys, collected monthly, also measure people’s feelings about their personal financial prospects and how they expect factors like unemployment, interest rates, and inflation to change in the future. The group has been collecting data across the United States since 1946.
