![](\"https:\/\/static.foxbusiness.com\/foxbusiness.com\/content\/uploads\/2026\/03\/motorist-gas-car-fuel-prices.jpg\")
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\u00a0Financial influencer Taylor Price joins \u2018Varney & Co.\u2019 to break down how shifting your mindset can help Americans grow wealth and achieve the American Dream.<\/p>\n
A new report by the Federal Reserve Bank of New York finds that the recent rise in gas prices has affected households very differently based on their income level.<\/p>\n
Energy prices hit a four-year high in March amid the Iran war, prompting the closure of the Strait of Hormuz, which is a chokepoint through which about 20% of the world’s oil supply passes through aboard tankers.<\/p>\n
The New York Fed’s analysis finds that high-income households increased their nominal spending on gasoline the most and kept their real consumption at a level that was essentially unchanged when compared with pre-war spending patterns.<\/p>\n
By contrast, low-income households decreased their real consumption of gasoline but also saw sharp increases in their nominal spending because of the higher gas prices, contributing to a so-called K-shaped pattern in gasoline consumption.<\/p>\n
GAS PRICES SURGE PAST $4.50 NATIONALLY AS IRAN TENSIONS PRESSURE DRIVERS<\/p>\n
Low-income households pulled back on their gasoline spending the most among income groups, the New York Fed found. (Jack Taylor\/Reuters)<\/p>\n
The patterns in gasoline consumption are a qualitative match to what played out when energy prices rose in the wake of Russia’s invasion of Ukraine in 2022.<\/p>\n
The New York Fed’s report used data from analytics firm Numerator that showed nominal gasoline spending rose over 15% in March, rising from 10% below its 2023 level to 5.5% above that mark.<\/p>\n
That increase was driven by gas prices, as real gasoline consumption declined 3%, whereas the Advance Monthly Retail Trade Survey found spending at gas stations rose 14.5% in March.<\/p>\n
CHEVRON CEO SAYS ECONOMIES ‘ARE GOING TO HAVE TO SLOW’ AS STRAIT OF HORMUZ CLOSURE DISRUPTS OIL SUPPLY<\/p>\n
Consumers across income groups pulled back, although high-income households’ spending changed the least. (Angus Mordant\/Bloomberg)<\/p>\n
Gas prices also contributed to a K-shaped pattern among income groups, as low-income households increased their spending the least by 12%.<\/p>\n
Despite that overall increase, low-income households cut their real gas consumption the most, buying 7% less gas, with higher prices contributing to the overall increase.<\/p>\n
Among high-income households, their nominal gas spending rose by 19%, which was the most among the income groups, largely because they reduced their real gas consumption by the least at just a 1% decline.<\/p>\n
RISING GAS PRICES ARE CRUSHING RESTAURANT SALES AS $4 A GALLON BECOMES TIPPING POINT FOR CONSUMERS<\/p>\n
Shipping traffic through the Strait of Hormuz went to a virtual standstill amid the Iran war. (Giuseppe Cacace\/AFP via Getty Images)<\/p>\n
Middle-income households had moderate increases in nominal spending and decreases in real consumption at gas stations, showing that the K-shaped consumption pattern for both nominal and real gasoline spending prevailed in March 2026.<\/p>\n
The New York Fed economists explained that the K-shaped pattern has “opened up much more than before” in comparison to the 2022 shock caused by Russia’s invasion of Ukraine.<\/p>\n
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“Higher-income households have reduced real gas consumption only modestly and increased gasoline spending considerably compared with 2023,” they explained. “In contrast, lower-income households increased spending by much less and decreased real consumption by much more, potentially by carpooling or substituting to public transit where available.”<\/p>\n
#York #Fed #finds #surging #gas #prices #hit #lowincome #households #hardest<\/p>\n","protected":false},"excerpt":{"rendered":"
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