American households pay nearly $450 more on average for energy amid Iran War, data shows

• Gasoline prices reached $4.39 per gallon (up 47% since March) and diesel hit $5.52 per gallon, with roughly half the increased spending coming from higher gas prices alone
• The $447 per household impact erased the $384 benefit from larger tax returns under the President's plan, with lower-income households disproportionately affected
• Consumer financial stress is evident: personal savings rate fell to 2.6% in April (lowest since the financial crisis) while credit card debt rose to $1.25 trillion, up nearly 6% year-over-year

Summary

American households have spent an average of $447.19 extra on energy costs during the three-month U.S.-Iran war, totaling nearly $60 billion nationwide, according to Moody's Analytics. This surge stems from sharp increases in fuel prices, with unleaded gasoline rising over 47% since early March to $4.39 per gallon, while diesel jumped similarly to $5.52 per gallon.

Key Breakdown:

• Roughly half the increased spending comes from higher gasoline prices
• Diesel price increases cost consumers over $20 billion
• Rising jet fuel costs added nearly $10 billion in airline fare increases (12% year-over-year in April)

Market Implications:

Moody's chief economist Mark Zandi warns that if prices persist, households could face nearly $2,000 in additional energy costs by the one-year mark, threatening an already soft economy. The energy price shock has exceeded the $384 per-household benefit from recent tax cuts.

Consumer Impact:

The financial strain is forcing Americans to deplete savings and increase debt usage. The personal savings rate plummeted to 2.6% in April—the lowest since the global financial crisis—while credit card debt reached $1.25 trillion in Q1, up 6% year-over-year and near the 2025 record high.

Consumer spending rose 0.5% in April, but income growth was flat, missing the 0.4% forecast. Major retailers including Costco and McDonald's report shifting consumer behavior, particularly among lower-income households most affected by energy and food inflation.

Goldman Sachs expects higher energy prices to continue eroding spending power through 2026, disproportionately impacting lower-income consumers.