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NY Fed Highlights K-Shaped Economic Impact at Gas Pumps: A Deep Dive into Disparities

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(NewsNation) — With gas prices climbing due to the ongoing conflict in Iran, a stark contrast in consumer behavior is emerging. Lower-income Americans are being compelled to reduce their fuel consumption, while those with higher earnings seem largely unaffected at the pump.

According to a recent study by the Federal Reserve Bank of New York, households earning under $40,000 annually have decreased their gasoline usage by 7% in March. Despite this reduction, they still faced a 12% increase in expenditure because of the elevated prices.

Conversely, households with incomes exceeding $125,000 reduced their gas usage by a mere 1%, a change deemed “essentially unchanged.” Nevertheless, their spending on fuel surged by 19%.

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