More than seven months into the U.S. war with Iran, the conflict has cost the average American household nearly $2,000, according to Moody’s Analytics chief economist Mark Zandi. This figure includes $1,100 in higher energy prices, $540 in increased interest rates, and $360 in military spending, with energy costs alone rising by $50 a week at current fuel prices, Fortune.com reported.
The war has sharply increased fuel prices, making driving and flying more expensive and raising costs for some goods. Motorists and airline passengers have experienced the clearest impacts as Middle East oil shipments face disruptions. Some companies have raised delivery charges or prices on select products, although many have absorbed higher production and transportation costs so far. A September surge in wholesale prices indicates that broader price increases may follow if fuel prices remain elevated, according to Fortune.com.
The rise in fuel prices has pushed regular gasoline from an average of $2.98 per gallon before the war to significantly higher levels, affecting transportation and goods movement costs. While retailers have not yet passed all these costs to consumers, the sustained increase in wholesale prices suggests potential inflationary pressures ahead. The war’s economic impact adds to existing strains on U.S. households as the midterm elections approach, highlighting the broader consequences of geopolitical conflicts on domestic economies.
Mark Zandi’s analysis underscores the ongoing financial burden on American families, with energy costs continuing to rise weekly. The next key data point will be upcoming wholesale price reports, which will reveal whether businesses begin passing on more of these costs to consumers in the form of higher retail prices.