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Macro EconomyMedium•24 March 2026•

1 min read

Gas Price Surge Threatens Gen Z Spending Growth Amid Iran Conflict

Key Facts

1Gas prices surged by 26% driven by geopolitical tensions and war in Iran.

2Gen Z and millennials had surpassed boomers in spending growth in 2025 prior to the crisis.

3The sharp increase in fuel costs is stifling the purchasing power of younger demographics.

Gas prices have surged by 26% following the escalation of geopolitical tensions and the outbreak of war in Iran, creating a significant supply-side shock. This sharp increase in energy costs is severely stifling the purchasing power of younger demographics, specifically Gen Z and Millennials. Prior to this crisis, these younger consumers had surpassed Baby Boomers in spending growth throughout 2025. However, the rising cost of fuel is now diverting disposable income away from non-essential sectors. Analysts note that while the surge is bullish for energy producers and the XLE ETF, it presents significant headwinds for the consumer discretionary sector (XLY). The shift in spending patterns could have broader implications for economic growth as household budgets tighten under inflationary pressure.

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