Source: Fortune
Summary
Bank of America’s spending data shows that Gen Z was finally starting to spend their money on non-essential items after years of being squeezed by rising rents and slow wage growth. However, the recent 26% year-over-year increase in gas prices threatens to undo this progress. Gen Z’s spending growth had surpassed that of Baby Boomers in mid-2025, and Millennials followed suit in December 2025. The turnaround was driven by rent relief and wage growth, but economists warn that higher gas prices could lead to a pullback in discretionary spending.
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The numbers tell one story. Bank of America’s data shows that Gen Z’s spending growth was finally gaining momentum, driven by rent relief and wage growth. However, the recent gas price spike threatens to stall this progress. Gen Z is particularly vulnerable to higher gas prices, with a higher ratio of gas spending to discretionary spending than other generations. The labor market also poses a risk, with young workers already experiencing higher unemployment rates.
The strategy enters a familiar phase. Gen Z’s spending revival could stall just as it was getting started, thanks to higher gas prices and a potential slowdown in rent growth. The brief, hard-won spending revival that defined the past several months could be undone by the very same factors that drove it in the first place.
Author: Evan Null
