The Index of Consumer Sentiment tallied at 53.3 in March, falling from 56.6 in February and registering its lowest level since December 2025. During the month, concerns centered on the U.S.-Iran war and elevated gas prices.
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Trade QQQ with leverage“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,” said Surveys of Consumers Director Joanne Hsu.
Short-Term Inflation Expectations Boosted by Rising Gas Prices
The average price for a gallon of gas in the U.S. has risen by 33% to $3.98 since the start of the war on February 28. Consumers have felt the pressure at the pump and now expect year-ahead inflation of 3.8%, up from 3.4% and registering the largest one-month increase since April 2025.
At the same time, long-run inflation expectations fell by 0.1% to 3.2%, signaling that consumers don’t expect the impact of the U.S.-Iran war to have long-lasting implications. The war is currently in its 27th day, while the Strait of Hormuz remains at a near standstill, disrupting the global supply of oil.