What $4 gas is doing to U.S. households — and why the economic pain is likely to last

Gas at an average of $4 a gallon represents a cost of living shock for tens of millions of America. Here's how to understand the pain

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It's a painful moment to fill up your car. Gas just topped $4 a gallon per AAA's nationwide average — up nearly 40% in just over 30 days.

For households across the U.S., the immediate math is straightforward and far from pleasant. In recent years, households have spent around $200 a month on gas. A 40% increase raises the monthly cost by around $100.

This matters because, according to the Bank of America $BAC Institute, nearly one in four U.S. households — about 24% of the total — spend over 95% of their income on necessities like housing, groceries, utilities, childcare, and gas, leaving little or nothing left over. That’s about 31 million households, or around 75 million people.

So, for these financially vulnerable individuals and families, the rising cost of gas is a major increase in the cost of living. Finding an extra $100 a month isn’t easy, and yet gas isn’t a purchase consumers can effortlessly cut back on. It takes time to find alternative ways to work and school, all the more so in areas with little public transportation.

Worse, the rising cost of gas doesn’t just impact what consumers pay at the pump. It flows through to other everyday costs that are even more inelastic, namely the price of food, plus a vast swathe of necessities from shampoo to laundry........

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