The gas-price surge triggered by Iran’s closure of the Strait of Hormuz is hitting lower-income Americans far harder than wealthy families, showing a wider economic disparity related to energy costs than after Russia’s invasion of Ukraine in 2022, according to a new analysis released Wednesday by the Federal Reserve Bank of New York.
Overall spending at gas stations jumped more than 15 percent in March, and real gasoline consumption fell about 3 percent. But those top-line numbers mask sharp differences in how Americans are responding based on their income.
“We find that households had very different experiences with gasoline spending,” researchers from the New York Fed wrote.
Low-income households — those earning under $40,000 — cut back on their gas consumption in March by 7 percent, possibly turning to carpooling or public transit alternatives, according to the report. But they still spent 12 percent more on gas than the previous month because prices rose so steeply.
