Source: Fortune
Summary
New research from the Federal Reserve Bank of New York found that lower-income Americans reduced their gas consumption by 7% in March, but still spent 12% more on gas due to spiking prices. Higher-income households, meanwhile, increased their spending on gas by 19% while reducing their consumption by only 1%. The report suggests that the gas-price surge has worsened the “K-shaped economy,” where upper-income Americans continue to do well while lower-income households fall behind.
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The numbers tell one story.
The New York Fed reports that total spending at gas stations jumped 15% in March, with lower-income Americans cutting back on driving and richer Americans making few changes. The figures suggest that the spike in gas prices is a big drag on lower-income people’s finances, with some spending 10% of their incomes on gas. The Bank of America Institute found that more expensive gas has pulled some spending away from discretionary items for poorer households.
The K-shaped economy enters a familiar phase.
