U.S. consumer sentiment dropped to the lowest level in the 74-year history of the University of Michigan’s monthly survey, underscoring a sharp deterioration in household confidence entering 2Q.

The preliminary April index reading came in at 47.6, down from 53.3 in March — a 10.7% month-over-month decline and below the prior record low of 50 set in June 2022.

The downturn was broad-based across demographics and income groups, with declines in both current conditions and future expectations. The expectations index fell to 46.1 — its lowest level since 1980 — while assessments of personal finances dropped roughly 11%.

Survey officials pointed to persistent inflation pressures and rising energy costs as key drivers, amplified by geopolitical uncertainty tied to the Iran conflict. Consumers also reported worsening buying conditions for big-ticket items, reflecting elevated prices and weakening confidence in the economic outlook.

Inflation expectations moved notably higher, with one-year expectations jumping to 4.8% from 3.8% in March, signaling growing concern that price pressures will persist.

Importantly, nearly all survey responses were collected prior to an early-April ceasefire announcement, suggesting the final April reading — due later this month — could show modest improvement. Still, economists caution that sentiment is likely to remain subdued as long as energy prices and broader cost-of-living concerns stay elevated.

For distributors, the historic drop reinforces a cautious demand environment — particularly for discretionary and durable goods — even as macro indicators like employment remain relatively stable.