Average CT Gas Price Up 52 Cents In Past Month; Consumer Sentiment At All-Time Low

As gas prices continue to rise across the nation, a recent study shows that consumer sentiment, which measures how people are feeling about the economy, is at an all-time low.

In Connecticut, the average price of a gallon of regular unleaded gasoline was $4.62 on Thursday, according to AAA, and as high as $6.16 across the country in California.

And while an official announcement of a recession may not be forthcoming from the National Bureau of Economic Research, the country likely went into an economic downturn as far back as late last year, according to Donald Klepper-Smith, chief economist at DataCore Partners.

“The factors that precipitate the downturns are all unique. What’s interesting about this is that the consumer confidence measures, as well as other private sector measures, are telling us that we probably went into an economic downturn sometime probably late 2025, early ’26,” Klepper-Smith said. “Fundamentally, back in 2008 or 2007 we had enough data to suggest we were in recession, but NBER did not make the official call until a year later.”

On April 24, the University of Michigan reported the index of consumer sentiment at 49.8 — up just slightly since it hit 47.6 earlier in that month, its lowest point since 1952 when the university started the index.

The lower sentiment was seen across party lines, age groups, education, and economic status, according to the survey.

The Iran conflict has had an impact, although a temporary cease-fire announced April 7 helped soften gas prices a bit, which helped sentiment, according to survey director Joanne Hsu.

However, “the Iran conflict appears to influence consumer views primarily through shocks to gasoline and potentially other prices. In contrast, military and diplomatic developments that do not lift supply constraints or lower energy prices are unlikely to buoy consumers,” Hsu said.

Meanwhile, year-ahead inflation expectations surged from 3.8% in March to 4.7% in April, according to the survey, which was the largest one-month increase since April 2025.

“The current reading exceeds those seen in 2024 and remains well above the 2.3%-3.0% range seen in the two years pre-pandemic,” Hsu said. “After hovering between 3.2 and 3.3% for the previous four months, long-run inflation expectations climbed to 3.5% in April, the highest reading since October 2025. In 2024, values ranged between 2.8% and 3.2%, while in 2019 and 2020, they were consistently below 2.8%.”

The next survey release for consumer sentiment from the University of Michigan is scheduled for Friday.

According to AAA, a gallon of unleaded regular gasoline averaged $4.62 in Connecticut on Thursday. A week ago it was $4.33. A month ago, it was $4.09. A year ago, $3.06.

Thursday’s state average of $4.62 was slightly higher than the national average, which was $4.55. Thursday’s average was also 36 cents away from the state’s highest average on record, which was $4.98 on June 14, 2022, a few months after Russia invaded Ukraine.

Connecticut’s average price per gallon of regular gasoline by county on May 7, 2026, according to AAA. For more data, click the map to visit AAA’s website. Credit: Screengrab composite / AAA / CTNewsJunkie

Klepper-Smith said the American consumer is pressed thin for a variety of reasons — from the surge in gas prices to the costs of groceries.

Americans were spending $125 million more in gas prices on May 1 over what they were paying April 24, Klepper-Smith said.

“The situation, particularly in Connecticut, where energy matters because you’re talking about people driving to work, you’re talking about heating your home, and gasoline and all of these things really come into play with Connecticut consumers,” he said.

Discretionary income and consumer spending power is now being directed at gas price increases or to pay for increases in government spending, Klepper-Smith said.

“And that’s the key because we’re looking at local budgets rising five, six, seven percent,” he explained. “And so there is not a lot of extra cash laying around. When you think about what this is, it’s punitive for consumers. It siphons off money that could be spent productively in other areas of the economy. And at the end of the day, it just confirms in my mind that we probably went into recession, probably late 2025, early ‘26, but we’re not going to get the official call anytime soon.”

Source: AAA

As the public sees what happens with oil prices, it’s not only going to impact home heating oil and energy, but will also affect consumers and their vacation plans, Klepper-Smith said.

“Are they going to be driving eight hours to Maine? There’s a whole bunch of things that really factor into play and there’s a psychological barrier that consumers hit when it went above four dollars,” he said, referring to the surge in gas prices. “It’s very possible that we could be seeing $5 a gallon and we already have that in many parts of the country.”

As far as how long this downturn will last, Klepper-Smith said it’s hard to tell. 

“I don’t know how long this downturn is going to last but from where I see fundamentally, when you talk about the two things that get us out of a recession – It’s either fiscal policy or monetary policy and right now interest rates aren’t moving down. They’re moving up,” he said. “We’re seeing the crowding out of private sector borrowing from the government and their increased borrowing needs. We’re looking at mortgage rates vis-a-vis the 10-year bond yield, rising and so this is an ugly mix of inflation, with declining consumer confidence and oil prices that have a big question mark pinned right on the front. So there are many unanswered questions here.”

Added into the equation is the federal government cutting funding to the states, which in turn cut funding to municipalities.

“Consumers in many respects are holding the bag,” Klepper-Smith said.