After inflation reached its highest level in nearly three years, economists are taking a look at what the future holds. Following recent global conflicts, forecasters predict that inflation is likely to continue worsening, with many now projecting the rate to hit 6% during the second quarter, a rate 3% higher than originally predicted just three months ago.
In a recent survey, the First Quarter 2026 Survey of Professional Forecasters, completed by the Federal Reserve Bank of Philadelphia in March 2026, forecasters had originally predicted that the consumer price index (CPI) would only grow 2.7% annually, down from 3.0% in their previous survey. However, following the beginning of the U.S. conflict with Iran, inflation began to surge, reaching 3.8% in April, which is the highest rate in nearly three years. This resulted in panelists shifting their forecast to an average annual CPI inflation rate of 6.0% in their Second Quarter 2026 Survey.
This information comes as gas and energy prices have soared in recent months as a result of the global conflict, with gas prices hitting their highest levels in four years. According to AAA, as of May 20, 2026, the national average gas price in the U.S. sits at $4.55, up $1.38 from one year ago. Gas prices have quickly had an impact on consumer goods and services dependent on fuel for transportation and delivery. Airfare prices increased by 3% from March, and groceries and other goods are likely to see an increase as well.
These price increases and inflation rates have consumers feeling particularly low. In a monthly survey conducted by the University of Michigan, Surveys of Consumers, May data found that consumer sentiment reached the lowest level recorded since the survey began in 1978. The Index of Consumer Sentiment reached 48.2%, down 7.7% since last year. In the survey, many consumers highlighted their concerns about high prices for personal finances and buying conditions for major purchases. A significant portion of survey respondents also expressed concerns about gas prices.
“About one-third of consumers spontaneously mentioned gasoline prices and about 30% mentioned tariffs,” Surveys of Consumers Director Joanne Hsu stated in the report. “Taken together, consumers continue to feel buffeted by cost pressures, led by soaring prices at the pump.”
High prices and increasing costs of living may only exacerbate existing financial stress. As inflation is predicted to get worse and global conflicts present uncertainty, many consumers may begin to wonder what their next step should be if facing financial burdens. Filing for bankruptcy might be an option for you. The attorneys at Sader Law Firm are here to help you evaluate your situation. Contact us at (816) 561-1818 for a free phone consultation and to learn more.