Pain at the pump adds up: Rising concerns about higher gas prices impact on spending

Summary

Steve Liesman discusses the impact of rising gasoline prices on consumer spending. He presents data showing a growing financial burden on households, with tax refunds no longer offsetting fuel costs. He cites warnings from Moody's and Goldman Sachs about a potential spending slowdown. He also analyzes oil supply dynamics, noting a large volume of oil on ships but limited supply behind it, and falling U.S. inventories.

• The total gas bill from higher oil prices is estimated at $59 billion, about $450 per household.
• Tax refunds initially offset the cost, but by mid-May fuel costs outstripped refunds.
• Mark Zandi warns that financially pressed consumers will turn cautious unless the war ends.
• Goldman Sachs expects spending headwinds from higher inflation for the rest of the year.
• Real incomes adjusted for inflation have fallen in five of the past seven months.
• Costco reported gas taking a bigger share of member spending and consumers becoming more price sensitive.
• There are 175 million barrels of oil sitting on ships, a potential supply glut if an Iran deal is reached.
• U.S. oil inventories are plunging, approaching a reckoning point if the strait isn't opened soon.