MW 'Our mood changes almost on a daily basis': Why $4 gas prices feel a lot worse this time around
By Quentin Fottrell
As far as gas prices go, there is no hive mind
Americans yearn for more confidence in the economy and their 401(k)s.
Our relationship with gas prices is complicated.
Here is a short, not-so-sweet, question from a reader. "I'm finding it frustrating and, frankly, disappointing that gas prices are $4 a gallon. The market is experiencing wild swings for the same reasons. Why do I feel like I'm the only one who is genuinely upset?" Join the club. Americans yearn for more confidence in the economy and their 401(k)s. So - yes - this reader is not the only one to be rattled, particularly as we are already navigating choppy economic waters.
As far as gas prices go, there is no hive mind. A recent Yahoo/YouGov survey found that most Americans (66%) disapprove of how President Donald Trump is handling gas prices, but a sizable minority (27%) approve. And yet a separate Reuters/Ipsos poll published last week found that rising gas prices are having an impact on the finances of U.S. households, as many people expect fuel costs to continue climbing. In fact, 21% said their finances were affected "a ?great deal."
Amid fears of stagflation, persistently high interest rates and a weakening labor market, our mood changes almost on a daily basis. Consumer sentiment rose slightly in March, according to data released Tuesday by the Conference Board; the index climbed to 91.8 from 91 in February, surpassing Wall Street Journal forecasts of 87.5. This does not reflect genuine strength as much as it signals "temporary resilience," says Simon Massabni, head of business development at XS, a multi-asset broker.
Public opinion has a notoriously short memory.
Despite rising gas prices, a low unemployment rate appeared to be enough to ease immediate concerns, and yet the University of Michigan survey for March, meanwhile, recorded a 6% drop in consumer sentiment. Go figure. Massabni says this points to a "low-growth, high-inflation" environment, the most challenging scenario for both monetary policy and equity valuations. As such, he expects the S&P 500 SPX to remain volatile, limited upside followed by swift corrections.
There have even been massive protests against the war in Iran in dozens of U.S. cities. But we're a wildly fickle bunch. If Trump does end the war in Iran in two to three weeks, as he said Tuesday, and the Strait of Hormuz reopens, allowing one-fifth of the world's oil and liquified petroleum to pass through, people might once again crank up the thermostat, ditch the carpool and make that commute for the free snacks - if only to prove they've got their swagger back.
Still, that letter writer is not alone. Market observers are scratching their heads in disbelief at the U.S. and Israel's war in Iran, hoping it will come to a swift end. Oil prices notched their largest monthly percentage gain on record, with the global benchmark Brent crude trading close to $120 a barrel, while West Texas Intermediate, the U.S. benchmark, has climbed above $100 per barrel for the first time since mid-2022.
Related: How a conflict can highlight long-term investment opportunities
Americans are arguably in a more vulnerable position today than they were in 2022.
Worse than 2022
Public opinion has a notoriously short memory. When gas prices hit $4 a gallon in 2022 consumers started to pull back on their spending, and talked more seriously about changing their spending habits by possibly cutting back on commuting. It was also considered a turning point for interest in electric vehicles, as sales surged. But it's debatable whether consumers really changed their behavior since then. (Smart investors, meanwhile, tend to keep their eye on the long game.)
Gas prices have a habit of making strange bedfellows of geopolitical and financial melees. They hit $4 a gallon this week, again, not since 2022 when they averaged $5 a gallon. They previously hit $4 a gallon in 2008 in the lead-up to the global financial crisis. Higher energy prices increase the cost of living on everything from transport to fertilizer for food - and make it more difficult for the Federal Reserve to cut rates.
Americans are arguably in a more vulnerable position today than they were in 2022. In 2022, millions of people staggered out of the COVID pandemic with savings. They were greeted by companies that were keen to offer better salaries to attract talent, helped by the rise in remote workers and a surge in hiring. Today, we are in a "low-hire, low-fire" economy as hiring managers keep a close eye on economic indicators.
Gas prices have a habit of making strange bedfellows.
From a jobs perspective, a softening in the labor market and slowdown in indicators like the Chicago PMI reinforce Massabni's view that the U.S. economy is heading toward a gradual slowdown rather than a sharp contraction. "It keeps markets in a constant state of anticipation, as any unexpected deviation, whether toward a deeper slowdown or higher inflation, could significantly alter monetary policy expectations," he says.
Optimists lurk in the short grass. Markets rose on Tuesday and Wednesday, shaking off worries that the Iran war will drag on like Russia's invasion of Ukraine, but dipped slightly Thursday in volatile trade as investors doubted a swift end to the war. The U.S. shed 92,000 jobs in February - a sop to economists who predicted a spike of 50,000 jobs. Still, others maintain the decline was mainly due to an expansive winter storm and healthcare strikes and, on Tuesday, ADP said the private sector actually added 62,000 jobs in February.
Rather than doomscrolling your way around this economic pothole, spare a thought for the good people of California who face gas prices of $5 or $6 a gallon, traditionally the highest in the country. On the subject of short grass, some wealthy Californians appear to be cutting back on their landscapers until they have more clarity on energy prices, the jobs market and geopolitical conflicts. Those bushes aren't going to prune themselves, but they can wait.
Rather than doomscrolling your way around this economic pothole, spare a thought for the good people of California.
You can email The Moneyist with any financial and ethical questions at qfottrell@marketwatch.com. The Moneyist regrets he cannot reply to questions individually.
More columns from Quentin Fottrell:
'We're living the simple life': I was a fisherman and my wife was a nurse. We retired with $6 million. Here's how we did it.
My PayPal account received money from the Philippines with two phone numbers listed. I called them. Big mistake.
'I was shoveling sidewalks at 8 years old': I'm a 73-year-old boomer dad with two kids. Here's what I teach them about finance
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-Quentin Fottrell
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April 03, 2026 08:54 ET (12:54 GMT)
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