Iran War Has Cost $1,000 Per U.S. Household, Estimates
One analysis estimates that the war with Iran has raised the average expenditure of each US household by $1,000 for gasoline, food and other costs.
The conflict between the United States and Iran has also begun to be felt in the economies of millions of families. A new analysis estimated that each American household has shelled out about $1,000 extra since the start of the war due to rising gasoline prices, food prices, interest rates and other expenses.
Moody's Analytics chief economist Mark Zandi, through a post on LinkedIn, made an estimate of the financial devastation of the war with Iran on American households.
"My estimate that the war with Iran has cost the average American household $1,000, and the number continues to rise, is, if anything, conservative. The true cost is likely higher, considerably higher," Zandi said.
This analysis arises in a context of persistent inflation and while both countries continue negotiations to reach a peace agreement. Although in recent weeks the price of gasoline has begun to drop, the effects of the conflict are still present in consumers' budgets.
What are families spending the most on?
According to the analysis, the biggest impact has been found on fuel spending, where Americans have spent around $300 more on gasoline since the conflict began in late February. The price reached $4.56 per gallon during May before beginning to decline.
The increase in the price of diesel also raised the costs of transporting goods, which ended up being reflected in supermarkets. As a result, average food spending increased by approximately $200 per household.
Zandi estimates that these increases are compounded by other indirect costs, such as higher interest rates that represent an additional expense of close to $150 per family, as inflation has reduced the chances that the Federal Reserve (Fed) will cut the cost of credit.
Additionally, the increase in jet fuel raised the price of airline tickets, with an average impact of $100 per household.
The analysis also considers the cost to taxpayers of US military support in the conflict. According to Zandi, that expense is equivalent to about $250 per family.
Other studies also reflect a higher cost
Although figures vary, other research agrees that the war has increased spending by American households. Researchers from Brown University estimate that families have paid about $486 additional dollars in gasoline and diesel alone since the start of the conflict.
For its part, the Institute of Fiscal and Economic Policy (ITEP) calculates an increase of close to $427 dollars per household due to the increase in fuel prices.
In recent weeks, the price of gasoline has shown a downward trend and currently stands at a national average of $3.85 dollars per gallon, according to the American Automobile Association (AAA), a figure below the $4.39 dollars recorded a month earlier, although it still exceeds the $2.98 dollars paid before the start of the war.
Specialists consider that prices could continue to decline if negotiations between the United States and Iran advance and the conflict manages to stabilize. Meanwhile, a Gallup poll revealed that two out of three Americans say they have faced economic difficulties due to the increase in fuel prices, one of the effects that has had the greatest impact on the family budget since the start of the war.