Gas Prices Offset Tax Cuts, Slow Economic Growth

0:00It's March 22nd. This is Durham News today, AI-powered stories from your sitting. I'm Cory with the story. The U.S. economy kicked off the year with hopes of a big boost from larger tax refunds, thanks to President Trump's tax cut law. Average refunds through early March stood at $3,676, up $352 from last year, but soaring gas prices are wiping out that gain from most folks. That changed fast with the Iran War starting on February 28th. Nationwide gas prices hit $3.94 a gallon by Sunday, more than a dollar higher than a month ago. Disruptions in shipping and production mean prices will stay high even if fighting stops soon. Lower and middle-income families build this the hardest since they get smaller refunds but spend a bigger chunk of their money on fuel. Households already face tight budgets, with savings down, hiring stalled, and more reliance on credit cards, or by now pay later plans for basics.

1:00Economists now predict gas could peak at $4.36 a gallon in May, then ease slowly through the year. That would cost the average household $740 extra on gas, almost matching the $748 refund bump. Spinning on restaurants, travel, and gadgets is holding up for now, showing some consumer toughness. Still, forecast cut growth to 1.9% this year, with short term inflation pressure before weaker spending kicks in.