American households have spent nearly $450 more 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 paid an additional $447.19 in fuel-related expenses since the conflict began, with cumulative costs reaching close to $60 billion across the country.
Moody’s data puts a concrete figure on the economic pressure Americans are feeling as the US-Iran war reaches its three-month mark.
Higher energy costs are forcing consumers to draw on savings and rely more heavily on debt to cover everyday 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.
If prices remain at current levels, the average household could absorb a hit of almost $2,000 by the one-year mark of the conflict, Zandi warned.
Roughly half of the increased energy spending comes from higher gasoline prices, with the average unleaded gallon costing around $4.39, up more than 47% since the start of March, according to AAA.
Higher diesel prices, used by delivery trucks and boats, have resulted in more than $20 billion in additional consumer expenses, with diesel similarly jumping around 47% since March to approximately $5.52 a gallon.
Consumers have also absorbed nearly $10 billion extra from rising jet fuel costs, with airline fares climbing more than 20% in April compared with 12 months ago, according to federal government inflation data.
The nearly $450 energy impact has more than cancelled out the $384 per household boost from larger tax returns under President Donald Trump’s “big, beautiful bill,” according to Moody’s, with most benefits from those tax cuts already exhausted.
Goldman Sachs has said it expects higher energy prices to “erode” consumers’ spending power through the rest of 2026, particularly affecting lower-income households that spend a larger share of their budgets on food and energy.
Costco reported “record-breaking” gas volumes at the end of its fiscal quarter as drivers sought out its lower-priced fuel, while McDonald’s CEO Chris Kempczinski warned that consumer spending among lower-income cohorts “may be getting a little bit worse.”
Consumer spending rose 0.5% from March to April according to government figures, but income growth came in flat for April, missing the consensus economist 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, signalling that consumers have been drawing down pandemic-era savings amid sustained inflationary pressures.
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.”