How insulated is the US economy from the Iran war?
The US economy has shown resilience in the face of global shocks, but it's not fully insulated from the Iran war, with gas prices rising and potential shortages of essential goods. If the conflict lasts for months, economists warn of a potential slowdown or recession, with the West Coast being particularly vulnerable to spillover effects.
The US economy has withstood a chaotic trade war and wild swings in the stock market. It's now absorbing a global oil shock better than most of the world. The economy entered the war on solid footing, with sturdy consumer spending and low interest rates. However, gas prices have risen, hitting inflation-weary Americans and businesses. Analysts warn of shortages of fertilizer and helium, which could impact farming and medical machinery. The West Coast is vulnerable to spillover effects, with California importing nearly 18% of its crude from the Gulf. Elevated gas prices and snarled supply chains could halt growth and tip the economy into recession.
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