The preliminary May reading fell to 48.2, the weakest since 1952, as the Iran war, Strait of Hormuz disruption and tariffs kept petrol prices above $4 a gallon.
The current conditions gauge dropped 9% to 47.8, while about one-third of respondents cited gasoline prices and roughly 30% mentioned tariffs as major concerns.
Economists said spending may hold up because the labour market remains resilient, with April unemployment at 4.3% and 115,000 jobs added, though companies such as Whirlpool reported recession-level demand.
Will the expected summer economic rebound actually reach the average American household amid soaring costs?
How will America secure its long-term energy supply and stabilize gas prices amid the ongoing Middle East crisis?
Can a booming AI sector shield the US economy from the fallout of war and trade disputes?