WASHINGTON — The Federal Reserve Bank of New York reported that lower-income U.S. households cut gasoline consumption by 7% in March 2026 yet spent 12% more at the pump, while households earning $125,000 or above increased their gas spending by 19% with only a 1% drop in usage. The report examined consumer behavior in the month following the outbreak of the Iran war on February 28, 2026.

Total spending at gas stations jumped 15% in March from the previous month, according to the report, while overall gas consumption fell 3%. By the end of March 2026, gas prices had risen about 25%, according to government consumer price data. As of early May 2026, gas prices had climbed 50% since the war began.

"We find that households had very different experiences with gasoline spending. With the sharp increases in gasoline prices in March, a K-shaped pattern in gasoline consumption emerged—showing faster consumption growth for high income households relative to low-income households," researchers at the Federal Reserve Bank of New York wrote.

Households earning less than $40,000 absorbed the largest relative hit, reducing consumption by 7% while still paying 12% more. Middle-income households' changes in gas spending and consumption fell between those of lower- and higher-income groups. The gaps between how each income group reacted to the price shock were larger than in 2022, after the Russian invasion of Ukraine. Higher-income households cut back more on their gas consumption in 2022 than they did in March 2026.

Wealthier households have seen increases in the value of their stock and real estate holdings since 2022. Poorer households likely benefited more from government stimulus programs in 2022.

A report from the Bank of America Institute found that among the poorest one-third of households, one-tenth now spend 10% of their incomes on gas, while higher-income households spend just 2.7% of their incomes on gas. Data from the institute showed that higher gas prices have pulled some spending away from discretionary items among its customers. The annual growth in poorer households' discretionary spending slowed in March 2026 from February, while it rose for middle- and upper-income households. Consumer spending, adjusted for price changes, ticked up 0.2% in March 2026, slightly below February's 0.3% gain, according to government data.