New York Fed Study Shows Rising Gas Prices Hurt Lower-Income Households More

Thu, 07 May 2026 00:30:00 +0200

A new analysis from the Federal Reserve Bank of New York says that the recent jump in gasoline prices has affected lower-income households much more severely than higher-income households. The report links the spike in fuel costs to the conflict in Iran and shows that rising prices are widening the gap in how different income groups experience inflation.

According to the study, households earning less than $40,000 a year reduced their gasoline consumption in March, likely because they could not absorb the higher costs as easily. The New York Fed says many of these households responded by driving less, carpooling, or relying more on public transportation where available. Even so, their gasoline spending still rose, meaning they were paying more for less fuel.

By contrast, affluent households saw little change in real gasoline consumption. Their spending at the pump increased, but the amount of gas they bought remained relatively stable after adjusting for inflation. The researchers de