All articles tagged with #us economy
The Commerce Department revised U.S. fourth-quarter GDP growth down to 0.5%, signaling a softer end to the year and potentially influencing the 2026 outlook and Federal Reserve policy as spending and investment cooled.
OECD projections indicate the United States could have the highest inflation among G7 economies in 2026 (about 4.2%), driven by the Iran conflict, lingering tariffs, and energy/grocery price pressures, with GDP growth around 2% as inflation remains above the Federal Reserve's 2% target.
The OECD’s outlook says the Middle East conflict will disrupt energy markets and push U.S. inflation higher than previously forecast, with headline inflation around 4.2% this year and easing toward 1.6% by 2027. U.S. growth is expected near 2% this year but to slow thereafter, and persistent energy-price pressures could keep central banks cautious, as energy disruptions remain a key risk to global inflation and growth.
As the Iran conflict persists, Gulf monarchies warn they may repatriate or slow hundreds of billions pledged for U.S. projects, threatening capital for U.S.-based startups, investment firms, and large companies that rely on sovereign-wealth funding; the disruption to oil revenue and tourism is prompting leaders to rethink commitments, likely slowing new investments in the short term, though some analysts say pledges will endure albeit at a slower pace. Defense and energy firms could still benefit as Gulf states rebuild and bolster defenses, but the overall funding landscape remains uncertain for months to years.
Analysts warn that intensifying violence in the Middle East could push oil toward record highs, lifting gas prices and inflation in the U.S. If Brent stays around $140–$150 a barrel for a couple of months, unemployment could rise as costs squeeze firms and consumer spending, with inflation potentially ticking toward 6% in a three‑month stretch; the U.S. is relatively insulated from energy shocks but still faces higher diesel costs and broader price pressures, though tax refunds may help households weather the spike.
Renewed Middle East tensions push crude prices higher, reviving 1970s-like inflation and growth fears as the Strait of Hormuz disruption tightens energy markets, reminding Americans that being a petrostate does not shield them from energy shocks.
Fed Chair Jerome Powell said he will remain in his role even if Kevin Warsh’s confirmation fails, signaling continuity in U.S. monetary policy leadership as Warsh’s nomination lingers.
The U.S. national debt has surpassed $39 trillion, highlighting mounting government borrowing and ongoing fiscal pressures.
A former Trump pick to lead the Bureau of Labor Statistics, EJ Antoni, warned that the US economy cannot withstand $100-a-barrel oil, saying inflation is worse than expected and energy-price increases will lift prices across the economy as the Iran conflict unfolds and markets brace for the Fed's rate decision.
Moody’s chief economist Mark Zandi says the odds of a U.S. recession are a “serious threat,” with the probability potentially rising above 50% in the next 12 months as oil and gas prices surge amid the U.S.-Iran conflict; before the flare‑up, the model put odds at about 48.6%, and historically nearly every recession since WWII followed a spike in oil prices (except the pandemic). Goldman Sachs meanwhile assigns a 25% recession risk over the next year after a weak February jobs report (−92,000 payrolls vs. +50,000 expected) with the unemployment rate at 4.4%. While higher oil prices can weigh on activity, the U.S.’s status as a net exporter and domestic supply can dampen the impact somewhat. The outlook remains uncertain for investors.
Axios argues the Iran war will test but not derail the U.S. economy, which has shown resilience due to its size, diversity, and adaptability. Oil prices have risen on Hormuz threats, but the United States’ energy independence—now a net oil exporter—helps cushion volatility. Growth remains positive (about 2.7% in Q1 per the Atlanta Fed) and unemployment sits around 4.4%. The bond market continues to reward the U.S. with low borrowing costs (10-year about 4.28%), underpinned by global demand for Treasuries and the dollar’s reserve-currency status. Risks include AI-driven labor disruption and potential oil-supply shocks, but the economy otherwise maintains forward momentum amid volatility and cautious consumer sentiment.
Rising oil prices and potential disruption from US-Israel strikes on Iran threaten US consumers and growth, with the Strait of Hormuz closure driving prices higher and fueling inflation fears. If the war endures, the economy could face stagflation or a recession, while prices for gas and goods stay volatile. The disruption also risks longer-term shifts in energy dependence, supply chains, and Fed policy as prices and borrowing costs rise.
U.S. inflation held at 2.4% year over year in February as higher food and housing costs offset declines in other goods; energy prices surged with the Iran-related conflict after the data, with gasoline topping $3.50 a gallon, a development analysts say could push inflation above 3% in coming months and complicate Fed policy. The report reflects prices from weeks before the war began.
Economist David Rosenberg argues that higher oil prices from the Iran conflict will squeeze consumer demand and push inflation down by year-end, making stagflation unlikely. He says inflation is on a long-term cooling path, with M2 around 4% and the Fed likely to hold rates with only a few cuts priced in as real incomes and GDP growth slow, while past oil shocks show inflation can spike before receding.
The Labor Department reports that for the week ending Feb 28, seasonally adjusted initial unemployment insurance claims were 213,000, unchanged from the prior week after a small revision; the 4-week moving average declined to 215,750. The insured unemployment rate was 1.2% for the week ending Feb 21, also unchanged.