The data: Nearly a quarter (24%) of US households were living paycheck to paycheck before the war with Iran, per the Bank of America Institute.

That cost-of-living crisis has gotten worse as the energy shock stemming from the conflict amplifies those pressures, with elevated oil prices rippling through the economy and raising the cost of everything from natural gas bills to nitrile gloves.

The result is growing strain on household budgets: 55% of US consumers say their financial situation is declining, up from 53% last year and the highest level in 25 years, per Gallup.

The details: Keeping up with essentials is becoming more challenging.

Gas prices are rising. The average price of a gallon of regular gasoline hit $4.18 on Tuesday, up 33% YoY and the highest level in four years, per AAA. That increase is significant for the 76% to 91% of Americans who commute by car.

Transportation is a key pressure point. Auto loan debt is rising, and negative equity is becoming more common and more severe as car prices climb and loan terms lengthen. Nearly a third, 30.9%, of trade-ins toward new vehicle purchases in Q1 2026 carried negative equity—the highest share since Q1 2021—with the average amount owed reaching $7,183, according to Edmunds. The situation could deteriorate as automakers like Hyundai, Nissan, and Toyota consider scaling back lower-priced models amid USMCA uncertainty, potentially limiting access to affordable vehicles, per The Wall Street Journal.

Air travel is also getting more expensive. Budget airlines have been hit hardest by rising fuel costs, with Spirit seeking government support and carriers like Frontier and Avelo requesting assistance to stabilize operations, per The Journal. If low-cost carriers pull back, consumers may face fewer affordable travel options, especially as larger airlines cut routes and raise fares.

Beyond transportation, other essentials are also under pressure. Rising energy costs are pushing up utility bills, while housing remains expensive due to elevated mortgage rates and limited supply. Insurance premiums—both auto and home—are climbing, and grocery prices are likely to rise as higher input and transportation costs flow through.