US households show K-shaped gasoline consumption as energy prices surge
Updated
Updated · Liberty Street Economics - · May 6
US households show K-shaped gasoline consumption as energy prices surge
8 articles · Updated · Liberty Street Economics - · May 6
In March 2026, a New York Fed analysis of 200,000 households found nominal gas spending rose 19% for high earners and 12% for low earners, whose real consumption fell 7%.
Overall gasoline station spending jumped more than 15% from February, while real consumption fell 3%, after Iran's closure of the Strait of Hormuz pushed energy prices to a four-year high.
Researchers said the pattern resembled the 2022 Russia-Ukraine energy shock but with wider income gaps, suggesting lower-income households may be carpooling or shifting to public transport where available.
As fuel costs create two Americas, what other essentials are the poor sacrificing just to get to work?
When the wealthy absorb fuel costs effortlessly, what hidden cracks does this mask in the national economy's foundation?
Is America's deep-rooted car culture becoming economically unsustainable for a majority of its citizens?
March 2026 Gas Price Surge Pushes Over 10% of U.S. Households to Spend 10%+ of Income on Fuel, Deepening Economic Inequality
Overview
The outbreak of the U.S.-Iran war in early 2026 caused gasoline prices to surge sharply, forcing households to spend significantly more on fuel despite reducing consumption. Lower-income families were hit hardest, spending 12% more on gas while cutting back on non-essential driving and relying more on public transit. This regressive price inflation, combined with extreme wealth inequality and limited access to affordable credit, deepened economic divides and forced many to cut spending on essentials. The rising fuel costs also dampened consumer sentiment and slowed overall spending growth, creating a K-shaped economic pattern where wealthier households increased luxury purchases while lower-income groups faced growing financial strain and uncertainty.