Rising gas prices hit low-income US households hardest, widening spending gaps by income level.

A Federal Reserve Bank of New York report reveals that the recent surge in gas prices due to Iran war tensions has affected US households unevenly. High-income households increased their nominal gasoline spending the most but kept their real consumption nearly stable, while low-income households reduced their real gas consumption significantly but still faced sharp increases in spending due to higher prices. This created a K-shaped pattern where wealthier groups absorb price hikes more easily, and lower-income groups cut back consumption but still spend more nominally. The pattern mirrors trends seen after Russia's 2022 energy price shocks and highlights growing inequality in how energy costs impact different income groups.