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Energy-Price Shock Hits a World Already Buried in Debt – WSJ

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Energy-Price Shock Hits a World Already Buried in Debt – WSJ

The costs of shielding the global economy from the most severe energy shock in decades are adding up—just when governments can least afford it.

Authorities around the world are trying to cushion the blow to ordinary people from soaring prices. The state of Georgia suspended its 33 cents-a-gallon gas tax, with other U.S. states considering doing the same. The U.K. government has promised to help pay some consumers’ heating-fuel bills. China, Hungary and Japan have limited prices at the gas pump.

The efforts contain inflation but strain already-groaning government budgets. The longer the crisis in the Persian Gulf lasts, the more that governments will feel compelled to do.

$5 Diesel is Crushing Truckers. It Will Soon Be Felt Across the Economy. – WSJ

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$5 Diesel is Crushing Truckers. It Will Soon Be Felt Across the Economy. – WSJ

Long-haul trucker Miguel Caveda recently spent around $1,800 on diesel fuel during a week on the road, about 40% more than he typically paid before the Iran war began.?

The sudden surge in diesel prices has eroded Caveda’s profit and upended his business in other ways, too. He has started searching out lighter hauls and avoiding hilly routes that guzzle fuel. He is also keenly aware that the steeper fuel costs will eventually trickle into the prices consumers pay for goods he is carrying—from tires to watermelon—assuming his business survives.

The U.S. Economy Is Insulated From High Oil Prices. Americans Aren’t. – The New York Times

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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

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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

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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.