Rising gas prices are colliding with an economy that was already losing momentum. In the weeks since the initial attack on Iran, Morning Consult’s economic data show consumer sentiment dropping sharply, the Consumer Health Index falling to a one-year low, and price sensitivity spiking across essential categories from groceries to airfare.

Morning Consult’s Gas Price Surprise index — which measures the net share of consumers who experienced higher than expected prices when making a purchase — soared to 29.3 in March, the highest level since April 2024.

Morning Consult’s Index of Consumer Sentiment — the highest-frequency measure of how consumers are feeling about the economy, including current buying conditions — dropped 2.3 points month over month across all respondents, extending a decline of 5.7 points over the past year.

Sentiment captures how consumers feel, but it doesn’t always predict how they spend. The Consumer Health Index pairs sentiment data with labor market conditions to produce a more direct read on actual spending demand. The CHI fell to 1.4 in March — its lowest level since March 2025 — signaling that the gas price shock is beginning to weigh on near-term demand, not just mood.

What makes this moment especially uncertain is the backdrop against which it is unfolding. For much of 2025, the economy’s surface-level resilience masked a deeper unevenness. The labor market had been gradually weakening — frozen hiring, automation-related anxiety, and slowly rising unemployment were chipping away at workers’ bargaining power. What kept the spending engine running was a narrow pillar: high-income households, whose Consumer Health Index stood at 10.6 as recently as late February.

That pillar is now cracking. In the latest weekly reading, high-income CHI fell to 8.7. Middle-income consumers sit at 5.0. And low-income consumers, who have been in negative territory for months, sank further to −3.4.

The contrast with the last gas price shock is instructive. In 2022, the labor market was historically tight and consumers could lean on rising incomes to sustain spending. In 2026, the cushion is thin. If consumers cannot earn their way through this shock, they will have to cut their way through it.

There are two countervailing signals worth noting. First, Morning Consult’s Indirect Consumer Inflation Expectations index has fluctuated in a narrow range without showing a sustained move higher, most recently reading 5.1%. Consumers are not yet treating the gas shock as the beginning of a broader inflationary spiral.

Second, Morning Consult’s Pay Loss Rate has been falling for low-, middle- and high-income adults for the past four weeks. This could signal a stabilizing labor market, providing a path for the economy to navigate through the war without falling into a supply-shock driven recession.

Morning Consult’s Price Response Indicators show a broad spike in price sensitivity across spending categories in March. The categories with the largest month-over-month increases are a mix of discretionary spending and frequently purchased essentials: airfare (+2.4 pp), gas/fuel (+1.8 pp), personal care (+1.4 pp), groceries (+1.4 pp), and restaurant/takeout (+1.3 pp).

Even as a growing share of consumers tried to cut back on gas spending, a far larger share absorbed the cost increases, with Gas/Fuel itself registering the largest increase in Morning Consult’s Price Absorbers indicator (+18.5pp month-over-month) — meaning a far greater share of consumers simply accepted higher prices rather than changing behavior, consistent with the category’s inelastic nature. Used vehicles (+2.6pp) and paper goods (+2.4pp) also saw meaningful increases in absorption. By contrast, electronics (-2.0pp) and housing (-1.8pp) saw the largest declines — categories where consumers appear to be pushing back or deferring purchases rather than absorbing costs.

Consumer spending on groceries is declining in real terms, down 11.7% year over year. Average monthly spending has fallen to $375, and groceries’ share of total spending has slipped from 12.9% to 11.2%. Among adults considering a grocery purchase, 48.2% reported being impacted by higher-than-expected prices — up 2.4 percentage points from a year ago.

The behavioral breakdown among grocery considerers tells a clear story: 21.0% are absorbing higher prices (down 6.8 pp YoY), 13.7% are trading down to cheaper alternatives (up 3.7 pp YoY), and 13.6% are price sensitive — unwilling to pay higher-than-expected prices at all (up 5.6 pp YoY). The direction is consistent across every metric: fewer consumers willing to absorb costs, more switching brands or walking away entirely.

Morning Consult’s brand-level intelligence sharpens the picture further. Among the customer bases of major grocery retailers, Costco and Whole Foods shoppers have seen the largest month-over-month declines in consumer sentiment, at -4.7 and -4.4 points respectively. Kroger shoppers fell 3.3 points; Publix shoppers, 2.4. These declines are most pronounced among retailers whose customers tend to have higher incomes — the same consumers whose broader financial health is now weakening.