Sustained high energy prices are starting to hammer lower-income consumers, calling into question how much longer the US economy can continue to shrug off the effects of the Iran conflict.
By the numbers: The surge in gas prices has meant rapidly deteriorating spending power for lower-income consumers, Citi analyst Jon Tower warned in a note on Wednesday.
Tower’s data shows aggregate purchasing power (netting wages and job growth against inflation) dipped negative for all sub-$50,000 (annual income) consumers in April. Compared to last year, middle-income consumers ($50,000-$70,000) are paying over $90 per month more for essentials, and more than $75 of that increase has happened in the past two months.
“Growth in spending power is slowing across the board,” warned Tower.
The latest on fuel prices: Gas prices in the US have reached a boiling point, with the…
