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Apr 3, 2025 4:52 pm
Global Media Network
U.S. energy costs surge $450 per household impact
U.S. households are facing higher financial pressure as fuel and energy prices continue to rise during the ongoing Iran war. A new economic analysis shows that the average family has already paid hundreds of dollars more in essential energy costs since the conflict began.
The study, shared with CNBC, estimates that each household has spent about $447.19 extra on fuel and energy-related expenses since February 28. The report was based on data from Moody's Analytics. It says the total burden on American consumers has reached nearly $60 billion nationwide.
Economists say the increase reflects sharp rises in gasoline, diesel, and airline fuel prices. The war has disrupted global energy markets and pushed up transportation costs. This has directly affected daily living expenses for millions of households.
Mark Zandi, chief economist at Moody’s Analytics, warned that the pressure could grow if the conflict continues. He said consumers may reduce spending in other areas to cope with higher fuel costs. That could slow down overall economic growth in the United States.
Zandi also estimated that if prices remain high for a full year, households could face close to $2,000 in extra costs. He said the situation could force many families to rely more on savings or credit to manage expenses.
Gasoline prices have been a major driver of the increase. Data from the American Automobile Association shows that the average price of unleaded fuel has jumped sharply since March. Higher diesel prices have also raised costs for transport companies, delivery services, and shipping operations.
Air travel has also become more expensive. Jet fuel costs have risen, leading airlines to increase fares. Government inflation data shows ticket prices have climbed compared with the same period last year.
Experts say these combined increases are creating a wider economic squeeze. Lower-income households are feeling the impact more strongly because they spend a larger share of their income on energy and food.
Large companies are already noticing changes in consumer behavior. Retailers such as Costco reported increased demand for cheaper fuel options at their gas stations. Fast-food chains like McDonald's have also warned that lower-income customers are reducing spending.
Despite rising costs, recent government data shows consumer spending still increased slightly from March to April. However, income growth remained flat during the same period. This mismatch suggests households are relying more on savings and borrowing.
The personal savings rate has dropped to one of its lowest levels since the global financial crisis. Economists say this shows that families are no longer building financial buffers. Instead, they are using what remains of past savings to cover daily costs.
Credit card debt has also increased. The total reached about $1.25 trillion in the first quarter of the year. That is close to record levels, according to data from the Federal Reserve Bank of New York.
Experts warn that this trend could become a long-term risk. Gregory Daco of EY-Parthenon said many households are now using savings, credit, and assets to maintain spending levels. He said this pattern is not sustainable if income growth stays weak.
Goldman Sachs also expects energy prices to remain a burden on consumers through 2026. The bank said higher fuel costs will likely reduce spending power, especially for middle- and lower-income families.
As energy markets remain unstable, economists say the U.S. economy may face continued pressure. Rising fuel costs, weak income growth, and increasing debt levels together create a fragile financial outlook for households across the country.
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