U.S. households pay $90 more

Citi analyst Jon Tower said on Wednesday that U.S. households earning $50,000 to $70,000 a year are paying more than $90 a month more for essentials than they were a year earlier. Tower said more than $75 of that increase came in the past two months, a jump he tied to a recent rise in fuel and other basic living costs. The figures appeared in a Citi note cited by Yahoo Finance on May 14, as fresh inflation data showed energy, food and shelter all rose in April. The latest squeeze lands on a part of the consumer economy that large retailers and packaged-goods companies watch closely because it sits above the lowest-income cohort but remains highly exposed to changes in gas and grocery bills. ### Which households are seeing the sharpest change? Tower said the middle-income group in the $50,000-to-$70,000 bracket is now spending more than $90 a month extra on essentials versus a year ago. His note said more than $75 of that increase occurred in just the past two months. (finance.yahoo.com) Tower also said aggregate purchasing power turned negative in April for consumers earning less than $50,000 a year after wages and job growth were netted against inflation. “Growth in spending power is slowing across the board,” Tower said, according to Yahoo Finance. (finance.yahoo.com) ### What changed in April’s inflation data? The U.S. Bureau of Labor Statistics said on May 12 that the consumer price index rose 0.6% in April after a 0.9% increase in March, and was up 3.8% from a year earlier. The agency said the energy index rose 3.8% in April and accounted for more than 40% of the monthly all-items increase. (finance.yahoo.com) The BLS also said shelter rose 0.6% in April, food increased 0.5%, and food at home rose 0.7%. Those categories map closely to the expenses that households cannot easily defer, including rent, groceries and transportation fuel. ### How much of this is about gasoline? AAA said the national average price for regular gasoline was $4.534 a gallon on May 14. (bls.gov) The Energy Information Administration said its latest gasoline and diesel update was released on May 12, with the next update due on May 19. Yahoo Finance separately reported on May 14 that gas prices above $5 a gallon in some places were starting to hit lower-income consumers, citing the same Tower research. (bls.gov) That report said the recent surge in gas prices was rapidly eroding spending power for lower-income households. (gasprices.aaa.com) ### Why do retailers and consumer brands care about this bracket? Primerica said its Household Budget Index tracks the purchasing power of middle-income families with household incomes from $30,000 to $130,000 using government data. That income band is important for mass retailers and staples makers because it includes shoppers who still spend broadly but tend to change behavior quickly when recurring bills rise. (finance.yahoo.com) Boston Consulting Group said in a January 2026 report that inflation is pushing consumers toward lower-priced and private-label products or causing them to skip purchases, which can squeeze margins at consumer packaged-goods companies. McKinsey said in an April 2026 food-and-beverage report that consumer priorities are being reordered as pressure on household budgets persists. (investors.primerica.com) ### What kinds of shopping changes are companies already watching? Packaging Dive reported that food and beverage companies have been adjusting pack sizes to match changing demand as inflation affects spending patterns. The publication said brands have added smaller, larger and multipack options, citing comments from executives on earnings calls. (bcg.com) EMarketer said brands have expanded size offerings to stay relevant with cost-conscious shoppers, while Mass Market Retailers reported that companies including PepsiCo, Campbell Soup and Mondelez have rolled out smaller formats to hit lower price points. Those moves give companies a way to preserve shelf presence, but they can also shift mix toward lower-margin products, according to BCG’s broader warning on margin pressure from consumer trade-down. (packagingdive.com) May 19 is the next scheduled EIA gasoline price release, and the next monthly CPI report from the Bureau of Labor Statistics will show whether the April rise in energy, food and shelter carried into May. AAA’s daily fuel tracker and the BLS inflation release will provide the next public readouts for retailers, consumer brands and investors watching household essentials spending. (emarketer.com) (eia.gov)