Greene County Democrat

Tag: Iran war

  • Newswire: Inflation hits highest one month spike in four years due to Iran War

    Newswire: Inflation hits highest one month spike in four years due to Iran War

    Gas station sign in California, showing high gas prices

    By Joe Jurado, NewsOne

    While Iran and the United States have agreed to a two-week ceasefire that’s looking shakier by the day, the impact of the war is still being felt by the global economy. Last month, inflation rose at its sharpest in four years, largely driven by higher gas prices. 

    According to NBC News, inflation rose to 3.3% in March, up 0.9% from the month before. Gas prices increased by 21.2%, their largest single-month increase since 1967. I gotta be honest, folks, I’m getting real tired of living through historically bad economic changes. While a ceasefire was declared last Tuesday, there hasn’t been a meaningful drop in gas prices. Anecdotally speaking, I’ve seen gas prices drop a whopping 10 cents from $4.99 to $4.89 in Arizona. 

    The misguided Iran war has created a series of headaches for the Trump administration. Trump ran on lowering prices, and AP reports that there are growing concerns that if gas prices continue to stay so high, it would have dramatic downwind consequences for the American economy. There was already a cost-of-living crisis before the Iran war, and the inflated gas prices could result in families struggling to afford other necessities, such as rent. Once the essentials become a struggle to afford, it would slow spending in other sectors, slowing the economy and potentially leading to further unemployment. 

    “It’s painful in the near term,” Michael Pearce, chief U.S. economist at Oxford Economics, told AP. “It’s going to get more painful in April,” as a result of further gas price increases lifting inflation even higher. 

    AP reports that there are growing concerns that if gas prices continue to stay so high, it would have dramatic downwind consequences for the American economy. There was already a cost-of-living crisis before the Iran war, and the inflated gas prices could result in families struggling to afford other necessities, such as rent. Once the essentials become a struggle to afford, it would slow spending in other sectors, slowing the economy and potentially leading to further unemployment. 

    From AP: Consumer sentiment plunged to a record low in April, according to a survey released Friday by the University of Michigan, largely because of the Iran war and concerns over higher gas prices. Their Index of Consumer Sentiment fell to 47.6, from 53.3 in March.

    “Many consumers blame the Iran conflict for unfavorable changes to the economy,” said Joanne Hsu, the university’s director of consumer surveys.

    High prices had angered American voters before the war and the spike in prices for oil and everything that entails, from the pump to the grocery store, could make it more difficult for the president’s party to hold on to seats in both the House and the Senate in next year’s midterms.

    Polling by the Associated Press-NORC Center for Public Affairs Research last month found that about six in 10 Republicans are at least “somewhat” concerned about affording gas in the next few months.

    Another point of concern regards the Strait of Hormuz, which has become a focal point in the conflict. While ships were able to flow freely through the Strait of Hormuz before the war, Iran has locked down access and is considering charging a toll for entry. This would obviously lead to a permanent increase in prices, as that cost would definitely be passed down to the consumer. 

    One of the downwind effects of the Strait’s closure is rising food prices. While food costs remained relatively neutral throughout March, much of the world’s fertilizer supply passes through the Strait of Hormuz. Should Iran and the U.S. fail to agree on a permanent ceasefire resolution, it would likely lead to food scarcity, which would obviously increase prices. Those increases would also be compounded by rising fuel costs, as the nation’s food supply is largely transported via diesel trucks. 

  • Newswire: Economists warn Iran War increases risk of recession in next 12 months

    Newswire: Economists warn Iran War increases risk of recession in next 12 months

    by Joe Jurado, NewsOne

    The war in Iran is already having a profound impact on the wallets of U.S. citizens. Gas prices have skyrocketed over the last month, with no sign they’ll be coming down anytime soon. As the war in Iran continues to disrupt oil supplies and shipping routes, several economists have warned that a prolonged conflict in Iran could lead to a recession within a year. 

    According to CBS News, economists at Goldman Sachs estimate that the increase in oil prices could also increase U.S. inflation by 0.2 percentage points to 3.1% by year’s end, placing a further drag on consumer spending. During an Australian news conference, Fatih Birol, the leader of the International Energy Agency, said that the disruption the Iran War has caused in the international oil supply is worse than the 1973 and 1979 oil crises combined. As a result of that disruption, Goldman Sachs currently estimates a 30% chance of recession within the next year. 

    Fortune reports that Moody Analytics raised its estimate of a recession to 48.6%, even higher than the Goldman Sachs prediction. “Even before the conflict, I thought recession and risks were on the rise,” Moody’s Chief Economist Mark Zandi said in an interview with CNBC on Wednesday. “Recession risks are very high—and unless the hostilities are coming to an end now, the president figures out a way to stand down, declare victory and move on, and Iranians follow suit—I think recession is more than likely by the second half of the year.”

    Now, if you’re making less than six figures, it probably feels like we’ve been in a recession for the last few years. Economists have called our current situation a “K-shaped economy,” which effectively means the rich get richer and the poor get poorer. The United States economy has largely been propped up by high earners who have continued spending like nobody’s business. “If they cut back on spending, it could push the economy into a recession,” PNC Financial Services Group chief economist Gus Faucher told CBS News. 

    “If you’re a consumer, you may want to hold off on making a big purchase because you’re not sure how the economy is going to look a few months from now,” Faucher added.

    The conflict in Iran has affected various sectors of the U.S. economy. The most obvious has been gas prices, which have risen to an average of $3.68 nationwide, up an entire dollar from the month before the war began. The cost of diesel, which is used in farming and trucks that ship goods, has risen even more dramatically from $3.75 a month ago to $5.37 as of this writing. 

    In Arizona, I’m currently paying $4.99 a gallon for gas. While my financial situation is decent enough that I’m not having to skip meals to make it work, that’s not the case for a growing number of Americans. 

    Beyond the price of gas, the Iran war is also impacting the cost of food. Much of the world’s fertilizer supply passes through the Strait of Hormuz, which has effectively been closed during the duration of the war. The shortage in fertilizer will likely result in less food being produced, which will inevitably increase prices. Not helping matters is that the U.S. economy was already in a bit of a slump before the war started. The whole reason President Donald Trump was re-elected in 2024 was largely due to the cost-of-living crisis. The job market was already bad, and an abysmal February jobs report showing that 92,000 jobs were lost didn’t exactly inspire confidence. With unemployment going up and prices alongside it, it paints a particularly dire picture for the U.S. economy.