"Higher gas prices that we have now and likely to have for the rest of the year are going to be more than enough to offset any boost to consumer spending from the higher tax refunds this year."
"Gasoline outlays jumped to $503.7 billion (annualized) in March 2026 from $422.4 billion in February, indicating a significant impact on household budgets."
"If gas prices remain high for the long term and if the investments surrounding AI slow down, growth could come down even faster."
"The savings rate has slipped to 4.0% from 5.2% a year earlier, leaving households with less cushion to absorb a fuel shock."
Morgan Stanley's U.S. economics team has lowered its growth forecast by 0.3 to 0.4 percentage points, attributing this to elevated energy prices. Higher gas prices are expected to negate any positive impact from increased tax refunds. Recent data shows a significant rise in gasoline expenditures, impacting household budgets. The macroeconomic environment is softening, with a decline in the savings rate and weak personal consumption growth. High gas prices and restrictive monetary policy are expected to further dampen economic growth.
Read at 24/7 Wall St.
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