American consumer confidence is still feeling the sting of the conflict in Iran, but a mix of stabilizing jobs and landmark court decisions might just save the domestic economy from a deeper tailspin.
New data released Tuesday by Morning Consult shows the Index of Consumer Sentiment (ICS) slipped another 0.2 points over the last seven days. This minor dip contributes to a larger, more painful trend: a cumulative loss of 5.6 points since hostilities first broke out on February 28.
While the national mood is sour, economists see a path toward a soft landing, provided the current ceasefire holds. The broader financial picture isn’t as bleak as the sentiment scores suggest.
Labor markets have held steady and even shown moderate improvement since mid-February, and inflation expectations are finally beginning to drift downward.
A major catalyst for this optimism is the Supreme Court’s recent decision to strike down the Trump-era tariffs. This legal shift is acting as a massive counterweight to the spike in energy prices caused by the war.
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According to a Morning Consult deep dive, the impact on small businesses has been nothing short of “dramatic.” Between the end of last year and the first quarter of 2026, the number of small businesses planning to hike prices plummeted from 49.8% to 32.2%. Meanwhile, nearly 65% of small business owners now say they plan to keep prices right where they are.
The survey, conducted in late March, reveals that the relief from lower tariffs is currently outweighing the economic anxiety caused by the war. Because sales expectations haven’t budged, experts believe the cooling of price hikes is being driven by lower costs for businesses, rather than a drop in customer demand.
The recovery remains uneven across different income brackets, however. While adults earning between $50,000 and $100,000 actually saw their sentiment rise by 1.2 points this week, lower-income households earning under $50,000 saw a 0.9 point drop.
For those at the lower end of the spectrum, the pay loss rate remains a “high risk” factor at 14.2%.
Looking ahead, Morning Consult will host Pernod Ricard on April 22 for a webinar focused on using real-time data to navigate these volatile market shifts.
For now, the U.S. economic outlook remains in a “medium” risk category for most adults, as the country waits to see if the ceasefire marks a permanent end to the conflict or merely a pause in the pressure.
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