Americans have paid nearly $450 more per household on energy costs since the start of the Iran war, according to a Moody’s Analytics analysis shared exclusively with CNBC.
The average household has spent $447.19 in additional fuel-related expenses since the conflict began on Feb. 28, with cumulative costs reaching nearly $60 billion nationally.
Higher energy prices have forced many consumers to draw down savings and rely more heavily on debt to cover basic living expenses.
“Unless the war ends soon, financially pressed consumers will have no option but to turn more cautious in their spending, threatening the already soft economy,” said Mark Zandi, Moody’s chief economist.
Zandi added that if prices remain at current levels, the average household could absorb a hit of almost $2,000 by the one-year mark of the war.
Roughly half of the increased energy spending stems from higher gasoline prices, with the average unleaded gallon costing about $4.39, up more than 47% since the start of March, according to AAA.
Pricier diesel, used in delivery trucks and boats, has contributed more than $20 billion in additional consumer expenses, with diesel prices jumping roughly 47% since early March to around $5.52 a gallon, per AAA.
Rising jet fuel costs have consumed nearly $10 billion from consumers, while airline fares climbed more than 20% in April compared to 12 months ago, according to federal government inflation data.
The nearly $450 energy impact has more than erased the $384-per-household boost from larger tax returns under President Donald Trump’s “big, beautiful bill,” with most benefits from those tax cuts already exhausted, according to Moody’s.
Goldman Sachs expects higher energy prices to “erode” consumers’ spending power through the rest of 2026, with lower-income households bearing a disproportionate burden given their larger budget share spent on food and energy.
Costco reported “record-breaking” gas volumes at the end of its fiscal quarter as drivers sought out lower-priced fuel, while McDonald’s CEO Chris Kempczinski warned that consumer spending among lower-income cohorts “may be getting a little bit worse” as energy prices squeeze budgets.
Consumer spending rose 0.5% from March to April, according to government figures, but income growth came in flat for April, missing economists’ consensus forecast of a 0.4% increase.
The personal savings rate fell to 2.6% in April, one of the lowest readings since the global financial crisis, far below the highs above 31% recorded in 2020.
American credit card debt reached $1.25 trillion in the first quarter, up close to 6% from a year ago and near the all-time record set at the end of 2025, according to the New York Federal Reserve.
“Consumers are increasingly facing an income squeeze, which is forcing them to use savings, credit and wealth to sustain their spending patterns,” said Gregory Daco, chief economist at EY-Parthenon. “What we’re seeing is, essentially, the use of savings to offset weak income growth.”