Gas Prices Surge, Eclipsing Tax Cut Benefits

0:00On March 22nd, the U.S. economy kicked off the year with hopes of a boost from bigger tax refunds thanks to President Trump's tax cut law. But an Iran war that started February 28th has driven gas prices sky high, wiping out much of that gain for average folks. Nationwide gas now averages $3.94 a gallon, more than a dollar higher than a month ago. Disruptions in oil shipping and production mean prices will stay elevated even if fighting stop soon. Lower and middle income families feel the pinch worst since they get smaller refunds but spend a bigger share of their money on fuel. Experts say this energy hit leaves little buffer for those already stretched thin. Economist project gas could peak at $4.36 a gallon in May, adding about $740 to yearly costs. For the typical household, right on par with the average refund bump of $748, refund so far, average $3,676 up just $352 from last year.

1:03Consumers face tougher times than in past shocks like the Ukraine crisis, with hiring stalled, savings down, and more reliance on credit. Growth should continue but at a slower 1.9% pace as higher fuel bills curb dining out and other spending, though resilience has, held up before.