“U.S. wholesale prices surged last month as the Iran war drove up the cost of energy,” the AP reports.
“The Labor Department reported Tuesday that its producer price index — which measures inflation before it hits consumers — rose 0.5% from February and 4% from March 2025. The year-over-year gains was the biggest in more than three years. Energy prices surged 8.5% from February.”
New York Times: “War in the Middle East has upended the world economy, the International Monetary Fund said on Tuesday, warning in a report that disruptions to oil markets could slow growth, fuel inflation and raise the possibility of a global recession.”
“The sober message came after the global economy had largely weathered a pandemic, Russia’s war in Ukraine and soaring inflation without tipping into a recession. But President Trump’s decision to initiate a war in Iran has stopped the world economy in its tracks.”
“President Trump’s naval blockade of Iran risks further upending a global economy already battered by weeks of war, escalating a regional clash into a worldwide financial shock that could prove more devastating than the fighting itself,” the Wall Street Journal reports.
“The U.S. blockade on ships entering or exiting Iranian ports is set to drain more oil from a tight market, prolong the squeeze on other key commodities flowing through the Strait of Hormuz and inject significant uncertainty into the global economy.”
Axios: “The economy has been steadily growing for the last five years, and inflation is way down from its peak nearly four years ago. Public opinion about the economy, by contrast, keeps plumbing new depths.”
“Americans are decisively negative about the economic picture, despite conventional measures of economic performance remaining reasonably solid.”
“It suggests both a new political state of nature and an undercurrent of gloom that traditional economic data and analysis don’t quite capture.”
Robert Pape: “The global economy is about to shift from price shock to physical constraint—and once that happens, policy will no longer stabilize the system; the system will begin forcing policy.”
“The language of this crisis is still wrong. Most commentary continues to describe rising oil prices as the central problem, as if this were another cyclical disruption that markets will absorb. That framing is now obsolete. What is unfolding is not primarily a price event but a structural supply shock operating on a system that lacks the capacity to adjust in the time that matters.”
Bloomberg: “A group of small businesses and 24 mostly Democrat-led states urged a panel of US trade judges to vacate President Donald Trump’s latest global tariffs, arguing that they were issued improperly under a law that became outdated when the US ditched the gold standard decades ago.”
Punchbowl News: “It’s been a brutal run for President Donald Trump and Hill Republicans. Trump’s poll numbers on the economy are dismal, dragging down his overall approval rating. That hurts every Republican on the ballot.”
“Trump is headed to Arizona and Nevada next week to talk about the One Big Beautiful Bill, the signature legislative achievement of his second term, which also remains unpopular.”
“But for some reason, it feels like these elevated prices might be with us for some time. The Strait of Hormuz isn’t fully open yet. Its status will be the focal point of the U.S.-Iranian negotiations that begin this weekend in Islamabad.”
“Consumer confidence plunged to a record low in April as fears mounted over rising energy prices and the broader impact of the Iran war, according to a University of Michigan survey Friday,” CNBC reports.
“The university’s headline index of consumer sentiment tumbled to 47.6, down 10.7% from March to its lowest on record. Current conditions and expectations indexes also saw double-digit monthly declines.”
New York Times: “The enduring strength of consumer spending, which powers two-thirds of America’s economic output, has been the main reason that the United States has evaded a recession through successive drubbings over five years: roaring inflation, a rapid run-up in interest rates and a barrage of tariffs.”
“But the war in the Middle East may prove one blow too many for even those hardy American consumers, who have also seen their balance sheets eroded by slowing wage increases, rising costs and a pullback in government safety net benefits. The personal savings rate is the lowest it has been since 2008, outside pandemic-era swings.”
The final GDP report for the last quarter of 2025 was downgraded to 0.5% from the previous 0.7% estimate which had already been revised downward from 1.4%.
New York Times: “The war in Iran has dealt a new blow to the world economy, which the head of the International Monetary Fund said on Thursday will mean slower growth this year because of the destruction of energy infrastructure and supply chain disruptions.”
“The unemployment rate is 4.3%, for heaven’s sake! That’s a boom, for God’s sake!”
— White House economic adviser Kevin Hassett, on Fox News.
Bloomberg: “Of all the things Donald Trump has done to disrupt global commerce, from levying punitive tariffs to tearing up trade deals, few would be as consequential as withdrawing and leaving the rest of the world to secure the Persian Gulf.”
“The move, which the US president has repeatedly threatened as his war with Iran drags on, would represent a break with decades of US policy keeping open the sea lanes that carry four-fifths of the $35 trillion global goods trade. Even the threat of reducing security for the Strait of Hormuz risks shaking confidence in a pillar of the world economy, as well as American wealth and power.”
“President Donald Trump is promising the economy will snap back as soon as the Iran war ends. But the economic wounds may prove slow to heal,” Politico reports.
“Beyond spiking oil prices, many of the war’s domestic knock-on effects — farmers’ scrambled planting decisions, upended plastic supply chains and a depressed spring housing market — will take months, possibly years, to unwind, industry analysts say. That leaves the administration with a limping economy heading into a midterm election season it had planned to spend selling its successes.”
Axios: The massive economic impact of the global energy crisis.
“I don’t think we’re going back to the pre-war prices for the foreseeable future. Certainly won’t be this year, won’t even be next year. Might not be ever.”
— Mark Zandi, chief economist at Moody’s Analytics, quoted by Politico.
Washington Post: “Amazon is adding a fuel surcharge to its e-commerce deliveries. Mortgage rates have risen to their highest mark in seven months. And consumers may soon see higher prices for soda bottles and detergents.”
“These are all early indications of the Iran war’s impact on the U.S. economy. So far, the costs of the joint U.S.-Israeli military campaign have been modest, especially compared with the economic turmoil roiling Asia, and U.S. growth remains solid…”
“But like thunderclaps that herald an advancing storm, rising energy bills, interest rates and supply shortfalls may be warnings of worse to come.”
CNBC: “The U.S. labor market bounced back in March, with job creation much stronger than expected though the broader picture of a slow-growth labor market held intact.”
“Nonfarm payrolls rose by 178,000 during the month, a reversal from the 133,000 decline in February and better than the Dow Jones consensus estimate for 59,000. February’s number was revised down by 41,000 while January was revised up by 34,000 to 160,000, putting the three-month average around 68,000.”
“With job creation higher, the unemployment rate edged lower to 4.3%.”
Wall Street Journal: “In the last year, the U.S. economy has seemed to defy gravity, withstanding a chaotic trade war, shocks to the labor supply, and wild swings in the stock market. Now it is absorbing a global oil shock far better than most of the world.”
“But it isn’t fully insulated from the Iran war. Gas prices have leapt, hitting inflation-weary Americans and businesses that rely heavily on fuel. Analysts have warned of shortages of fertilizer, necessary for farming, and helium, a critical component for medical machinery and chip production. European pain matters for the U.S., too: Foreign customers for U.S. goods and services might lose buying power as their own economies struggle.”
Taegan Goddard is the founder of Political Wire, one of the earliest and most influential political web sites. He also runs Political Job Hunt, Electoral Vote Map and the Political Dictionary.
Goddard spent more than a decade as managing director and chief operating officer of a prominent investment firm in New York City. Previously, he was a policy adviser to a U.S. Senator and Governor.
Goddard is also co-author of You Won - Now What? (Scribner, 1998), a political management book hailed by prominent journalists and politicians from both parties. In addition, Goddard's essays on politics and public policy have appeared in dozens of newspapers across the country.
Goddard earned degrees from Vassar College and Harvard University. He lives in New York with his wife and three sons.
Goddard is the owner of Goddard Media LLC.