Americans spent about $450 more per household on rising energy costs during the Iran war, according to research shared exclusively with CNBC’s Steve Liesman.
The average household has shelled out $447.19 in additional fuel-related costs since the dispute began on Feb. 28, data from Moody’s Analytics was obtained. That cost American consumers nearly $60 billion as gasoline prices and airline fares rose.
Moody’s data puts a dollar value on part of the economic pain Americans are feeling as the war reaches the three-month mark. Higher energy costs can force consumers to raid their savings and become more dependent on debt to cover costs.
“Unless the war ends quickly, financially strapped consumers will have no choice but to exercise more caution in their spending, threatening an already fragile economy,” said Mark Zandi, Moody’s chief economist.
If prices stay at current levels, the average family could reach almost $2,000 during the one-year war, Zandi said.
Almost half of the increase in spending so far has come from higher fuel prices. The average gallon of gasoline in the US was about $4.39 on Friday, up more than 47% since the start of March, according to AAA.
Pricier diesel, used in vehicles such as delivery trucks and boats, led to more than $20 billion in additional costs for consumers. Diesel prices have also fallen about 47% since early March to about $5.52 a liter, per AAA.
Consumers have given up nearly $10 billion due to rising jet fuel costs. Air fares rose more than 20% in April compared to the previous 12 months, federal inflation data shows.
That nearly $450 result more than offsets a $384 per household increase in capital gains taxes this year under President Donald Trump’s “big, good bill,” according to Moody’s. Most of the big tax cut benefits have already run out, Zandi said.
Goldman Sachs said it expects high energy prices to “destroy” consumer spending through 2026. It should especially affect low-income families who spend the bulk of their budgets on food and energy, the bank said.
Costco saw “record-breaking” gas volumes at the end of the fiscal quarter as drivers sought cheaper fuel, the retailer said Thursday. McDonald’s Chief executive Chris Kempczinski warned this month that consumer spending – particularly among low-income groups – “could get worse” as prices squeeze pocketbooks.
Turning to savings, credit
Consumer spending rose 0.5% from March to April, according to government figures released on Thursday. But some data points show that that doesn’t come from self-reports.
Income growth slowed in April, missing the consensus forecast among economists for a 0.4% increase.
The personal savings rate fell to 2.6% in April, one of the lowest figures since the global financial crisis. It is far from the 31% seen in 2020, which indicates that consumers have continued to spend through the pandemic and the flood in the midst of inflationary pressure.
U.S. credit card debt hit $1.25 trillion in the first quarter, up 6% from a year ago, the New York Federal Reserve said this month. That’s close to the all-time record set by the end of 2025.
“Consumers are increasingly facing income pressures, forcing them to use savings, credit and wealth to maintain their spending habits,” said Gregory Daco, economist at EY-Parthenon. “What we’re seeing, in fact, is austerity spending to reduce weak income growth.”
– CNBC’s Steve Liesman and Betsy Spring contributed to this report.
