The US economy has been remarkably resilient for years, withstanding historic pandemic-era inflation, $5-a-gallon gasoline, a dramatic hiring slowdown and the Federal Reserve’s war on inflation.
Now, the economy faces a new test: an actual war.
The war with Iran has sparked an epic oil supply disruption — the biggest in history — and price spike, driving up the cost of everything from gasoline and diesel to jet fuel.
Economists warn that the war has increased the risk of a recession. And the longer the crisis lasts, the greater the danger to an economy that already looked vulnerable before the chaos in the Middle East.
“The US is and has been on the precipice of recession for quite some time. It only requires one thing to knock us over. Could oil do it? Absolutely,” said Justin Wolfers, an economics professor at the University of Michigan.
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