Iran War Energy Costs Hit U.S. Households Hard

CNBC reported Friday that American households have absorbed nearly $450 in additional energy expenses since the Iran War began. A Moody’s Analytics breakdown shared exclusively with CNBC puts the precise figure at $447.19 per household. Across the entire country, that translates to roughly $60 billion in cumulative consumer spending on fuel-related costs.

A Three-Month Conflict With a Growing Price Tag

The U.S.-Iran war has now passed its three-month mark. Moody’s chief economist Mark Zandi warned that consumers under financial pressure will have little choice but to pull back spending, which could further strain an already weakening economy. If energy prices remain at current levels, Zandi projects the per-household cost could approach $2,000 by the conflict’s one-year anniversary.

Gasoline accounts for roughly half of the added burden. The national average for a gallon of unleaded fuel reached approximately $4.39 on Friday, a jump of more than 47% since the start of March, according to AAA. Diesel has climbed by a similar margin to around $5.52 a gallon, piling more than $20 billion in extra costs onto consumers. Surging jet fuel prices have pushed airline fares up more than 20% year-over-year in April, costing consumers an additional $10 billion.

Energy Surge Wipes Out Tax Cut Gains

The $447 energy hit has more than erased the roughly $384 per-household benefit from larger tax refunds delivered under President Donald Trump‘s tax legislation, per the Moody’s analysis. Zandi noted that most of the windfall from those cuts has already been spent. Goldman Sachs separately expects elevated energy prices to erode consumer purchasing power throughout the remainder of 2026, with lower-income households facing disproportionate pressure given their higher spending share on food and fuel.

Retailers are already feeling the strain. Costco reported record gasoline volumes at its pumps near the end of its most recent fiscal quarter as drivers sought out cheaper fuel. McDonald’s CEO Chris Kempczyk cautioned this month that spending among lower-income customers appears to be deteriorating further.

Savings Depleted, Debt Rising

Consumer spending edged up 0.5% from March to April, but the underlying picture is less reassuring. Income growth came in flat, missing economist forecasts of a 0.4% rise. The personal savings rate dropped to 2.6% in April, among its lowest readings since the global financial crisis. American credit card balances hit $1.25 trillion in the first quarter, up nearly 6% year-over-year and close to an all-time high, the New York Federal Reserve reported. EY-Parthenon chief economist Gregory Daco described the dynamic as consumers using savings and debt to offset stagnant income growth rather than spending from strength.

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