Gas price sticker shock may be beginning to take a bite at certain sectors of retail.
Total debit and card spending per household was up 4.7% year over year in the week ending March 28, according to new data from Bank of America. The steady climb in gas prices, driven by the US-Israel war on Iran, has materially lifted sales at gas stations, BofA’s data shows.
For the week ending March 28, gas station sales surged 21.4%. Sales in this category increased by more than 20% for six out of the eight measurement days.
At the same time, sales at furniture stores fell each day of the measurement period (see chart below). Sales at department stores worsened incrementally as the week progressed. Home improvement spending also saw a drop.
Since the start of the Iran war on Feb. 28, US gasoline prices have surged sharply. The spike in global oil markets reflects one of the fastest increases in years.
National average gas prices have climbed from roughly the low-$3 range to above $4 per gallon in a matter of weeks, with some regions such as California seeing $6 per gallon or higher.
Read more: How oil price shocks ripple through your wallet, from gas to groceries
The jump has been driven primarily by supply disruptions tied to the Strait of Hormuz, a critical artery for global oil flows, along with higher shipping and insurance costs and a geopolitical risk premium.
As a result, US drivers are facing a sudden and highly visible increase in fuel costs, with analysts warning that prices could remain elevated even if tensions ease due to lingering supply constraints.
The economic uncertainty has begun to show up in economic data releases.
The University of Michigan Consumer Sentiment Index plummeted to 58.4 in late March — a level not seen since the height of the 2008 financial crisis. Real gross domestic product (GDP) growth forecasts for 2026 have already been trimmed by 40 basis points, a sharper downward revision than that seen in the Chinese economy.
The labor market is beginning to cool, with initial jobless claims ticking up to 235,000 last week as high-input costs force energy-sensitive industries to pause hiring.
Athletic apparel giant Nike (NKE) issued a stock price-crushing earnings warning for the current quarter late Tuesday.
“It’s [the war’s economic damage] not visible in the data, but you wouldn’t expect it to be that visible yet,” BCA Research strategist Peter Berezin warned on Yahoo Finance’s Opening Bid. “We know that this is going to have a major impact on the economy. Gasoline prices are up a dollar. Diesel prices are up about $1.70 per gallon. And that’s going to affect everything from the cost of transport to other important expenses that households face. Fertilizer prices are going up. So this is going to weigh on the economy at a time when the economy was not particularly strong to begin with.”