People still have jobs to pay for that $4 per gallon gas, at least according to JPMorgan Chase CEO Jamie Dimon.
“So if you look at gas, it’s literally a rather small component of consumer spend,” Dimon told Yahoo Finance on a media call Tuesday when asked why the consumer has remained so resilient. “So obviously, for the lower-income people, it’s more. But they have jobs, and they have wages … People need some extra income to fix a car or medical bill, they maybe take a gig job or cut back on travel or something like that. But always think the most important thing is jobs. And there’s plenty of jobs. Unemployment is rather low, so that’s what it is.”
The US economy added a surprising 178,000 jobs in March after a dismal run of employment reports. The unemployment rate ticked down to 4.3%.
Whether that consumer resilience can continue if the US-Iran conflict continues is anyone’s guess. But the backdrop for consumer spending remains mixed, at best.
Read more: What an extended war with Iran could mean for gas prices
Over the past several days, oil prices have undergone a volatile relief-and-retreat cycle as the market reacted to the shifting geopolitical landscape in the Middle East.
After peaking near $120 a barrel amid Operation Epic Fury, prices plunged sharply early last week.
The sell-off in oil prices has continued into this week, with WTI crude (CL=F) now hovering around $92 per barrel.
The nation’s average gasoline price has been virtually unchanged over the past week and stands at $4.07 per gallon, according to the latest data from GasBuddy.
“The move toward a full blockade of the Strait of Hormuz is compounding global supply concerns and risks further disrupting flows, which pushed oil prices sharply higher in Sunday night trading,” GasBuddy head of petroleum analysis Patrick De Haan warned. “As a result, gasoline prices are likely to jump again this week, with diesel expected to follow, until there is a meaningful restoration of shipping through the strait.”
Read more: How oil price shocks ripple through your wallet, from gas to groceries
Consumer weakness has subsequently started to appear.
In early April, the University of Michigan’s Consumer Sentiment Index tanked to a record low of 47.6, down from 53.3 in March. This is the lowest reading since the survey began in 1952, with consumers calling out the Iran conflict and soaring gas prices as the main reasons for their pessimism.
Constellation Brands (STZ) — the US maker of Modelo and Corona beers — withdrew its previously issued fiscal 2028 outlook last week. It reported slightly weaker demand as consumers navigate high prices across the board.
