Consumer resilience meets rising energy costs

Dave Harrison Smith, CFA
Chief Investment Officer
April 20, 2026

Tracking the consumer spending response to higher gas prices

The early transmission of the war in Iran into the U.S. economy has been through gasoline prices. Prices rose a stunning 35.9% from late February through March. This move represents the largest five-week surge since the U.S. Energy Information Administration began tracking the data in 1991. Average national prices have remained elevated in April, hovering near $4.00 per gallon.

National U.S. regular retail gasoline price, trailing year

With several weeks of data now available, we can begin to track the early impacts on consumer spending trends. Studies have found that gasoline demand has historically been relatively inelastic; consumer demand for gasoline does not change significantly despite changes in gasoline prices. Instead, the adjustment typically comes through reallocation of wallet share, with consumers decreasing spend in other categories. Luxury goods and discretionary purchases in particular can come under pressure.

So far, the consumer spending reaction to higher gas prices has been limited. Analyzing near-real-time credit card spending data from Bank of America, overall spending remains resilient through mid-April, with both the 14-day and 30-day moving averages for total card spending above the 90-day average, suggesting a modest acceleration in spending behavior rather than a slowdown.

Credit card spending: 14-, 30-, and 90-day moving averages vs. prior year

Unsurprisingly, spending at the pump has surged. The 14-day moving average of gasoline outlays is up more than 20% versus last year. Notably, this is below the average increase in gasoline prices, suggesting a modest change in consumer behavior.

Gasoline spending: 14-, 30-, and 90-day moving averages vs. prior year

Other categories generally look on trend. Below we show the year-over-year change in average monthly spend, broken down into broad spending categories. Discretionary spending, including general merchandise, clothing, and entertainment categories, continues to track in line with prior trends. Online retail spending, as well, looks firm.

Notably, spending on airlines appears to be an exception. Airline spending reflects a sharp increase in March, followed by a significant slowdown in April. This may reflect a pull-forward in demand, with consumers anticipating rising airfares and booking summer trips early to lock in lower prices. Whether this proves to be a temporary shift or an early sign of demand destruction is an area to monitor going forward.

The broad takeaway is that consumers have remained resilient despite considerable geopolitical and economic volatility. The key question is the duration of that strength. The longer elevated energy prices persist, the greater the economic impact on both inflation and consumption, and the greater the risk that higher costs begin to erode relative resilience.

Retail category year-over-year change heatmap

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