In February, Americans were feeling pretty good about their financial standing. But that was before theIran war, which is threatening to upend household budgets.
ANew York Federal Reserve surveyreleased Monday found that consumers expectedinflationto be lower in the year ahead, and households, overall, said they werebetter off than a year ago. The New York Fed's monthly Survey of Consumer Expectations was fielded from Feb. 2 through Feb. 28.
That same day, the U.S. and Israelattacked Iran, causing the biggestoil supply disruption in history. U.S. crude prices soared more than 35% as a result, recently notching thebiggest weekly gainsince the futures contract began trading in 1983.
U.S. oil priceswent on to hit a high of $119.50 on Monday, and the national averagegasolineprice topped $3.50 a gallon as of Tuesday, up 21% from a month ago, according toAAA.
Though U.S. oil prices droppedbelow $90per barrel Monday afternoon andcontinued to slideon Tuesday, they remain far above the near $60-per-barrel level where they started the year.
President Donald Trumppostedon Truth Social Sunday evening that a gain in "short term oil prices" was a "very small price to pay" for "safety and peace."
However, experts say surges in energy costs have fed into longer-terminflation fears.
"Consumers threaten to be hammered by the surge in oil prices, which has already lifted the cost of a gallon of gas by 50 cents," Mark Zandi, chief economist at Moody's, told CNBC.
"If oil prices stay near current levels of $100 per barrel, gasoline will be closing in on $4 a gallon by this time next week. Inflation will quickly accelerate, cutting into consumers' purchasing power, and hitting consumer spending, GDP and jobs," Zandi said.
Even before the expandingU.S. war in theMiddle Eastfueled inflation fears, thehigh cost of livingand a softeninglabor marketpointed to anaffordability crisistaking hold.
Source: Drudge Report
