Iran attacks threaten US economy with more uncertainty around inflation, growth

WASHINGTON (AP) — The U.S. and Israeli attacks on Iran add yet more question marks around a U.S. economy already buffeted by on-and-off tariffs, weak hiring, and lingering inflationary pressures.

The war has already raised oil prices and could lift prices at the pump as early as this week, but the ultimate impact on the economy and inflation will depend on the length and severity of the conflict, economists say. Should it wind down in a week or two, its economic effects would be minor and short-lived.

Yet a longer war that pushed oil past $100 a barrel for an extended period would worsen inflation, at least temporarily, while slowing growth and intensifying Americans’ unhappiness with the cost of essentials. After nearly five years of rising prices, concerns around affordability have undercut President Donald Trump’s support in polls and bolstered Democrats in recent elections.