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The U.S. Economy Is Insulated From High Oil Prices. Americans Aren’t. – The New York Times
The jump in oil prices to over $100 a barrel in recent weeks will push nearly every major economic variable in the wrong direction. Inflation will be faster. Growth will be slower. Unemployment will most likely be higher. If the war were to last longer than expected, or energy prices were to go higher — as they have in recent days — the damage would grow.
Still, unless the situation takes a significant turn for the worse, the impact will most likely be modest, measured in tenths of a percentage point of economic growth. Federal Reserve policymakers, at their first meeting since the war began, made only small adjustments to their economic forecasts for the year and left interest rates unchanged.
Iran’s Real War Is Against the Global Economy
Iran may be losing the military contest with the United States. But it is fighting a different war—one aimed at the global economy.
Over the past 12 days, the United States has demonstrated clear military superiority. Iran’s navy has been severely degraded, with more than 50 ships sunk or damaged; its retaliatory missile launches are down more than 90 percent; and its air force has been grounded. On the battlefield, the scorecard favors Washington, despite risks of escalation.
Strategically, the picture is far less certain. Even as the Trump administration struggles to define its objectives—be it decapitating Iranian leadership, destroying Iran’s nuclear capability, or pursuing regime change—it must confront a new reality.
The United States and Israel are fighting the Islamic Republic. Iran is fighting the global economy.
U.S. Leading Indicators Forecast Further Slowdown – WSJ
The U.S. economy is expected to slow further amid continued headwinds, while conflict in the Middle East further clouds the growth outlook, according to a basket of monthly economic indicators.
The Leading Economic Index, or LEI, published Thursday by research group The Conference Board, inched down by 0.1% to 97.5, after a 0.2% decline in December.
“The U.S. LEI fell further in January, as consumer expectations retreated again and building permits softened,” said Justyna Zabinska-La Monica, senior manager at The Conference Board.
The reading signals continued headwinds to economic activity, though data showed improvement over the six-month period, she said.
The index fell 1.3% over the six months between July and January, compared with a 2.6% contraction over the previous six-month period, according to the report.