US Economy Grew 2 Percent in Early 2026 Even as War in Iran Began to Hit Energy Prices

The American financial system prolonged a streak of resilience and expanded at an annual charge of 2 p.c in the primary three months of the yr, even as international vitality costs emerged in the primary weeks of warfare with Iran.

The information launched by the Commerce Department on Thursday provided the primary official snapshot of how the US financial system is broadly faring for the reason that oil shock from warfare with Iran started to work its manner by way of costs and enterprise selections. The battle began in the final of the three months lined in the information launched on Thursday. The report confirmed typically optimistic developments in non-public funding, client spending and authorities expenditures earlier than the warfare and in its first weeks.

The efficient closure of the Strait of Hormuz has despatched oil costs hovering by greater than 60 p.c. The value of Brent crude, the worldwide benchmark for oil, jumped up to $120 a barrel this week from a prewar degree of round $70 a barrel in February. Contracts for July supply of crude oil have additionally topped $100 barrel, heightening fears of a protracted disruption and shortages for petroleum-based merchandise.

Despite unfavourable client sentiment close to historic lows and weak hiring urge for food amongst employers, information on consumption, which constitutes roughly 70 p.c of gross home product, has held up, particularly amongst these households in the highest third of earnings.