Close Menu
    Stocks

    US Economy Grew 2% Amid Iran Oil Shock

    GDP just came in at 2% annualized growth for Q1, which is actually a pretty solid number considering everything going on. For context, last quarter was basically flat at 0.5%, partly because of that six-week government shutdown dragging everything down.

    The rebound is being driven by a few things. Government spending bounced back hard — up 4.4% in Q1. Consumers kept spending too, which honestly surprised a lot of analysts, given that gas is now over $4 a gallon nationally. Part of that might be tax refunds, which are running about $330 higher on average than last year. Mark Zandi at Moody's specifically called out March refunds as a big factor.

    That said, the energy situation is still ugly. Brent crude is sitting above $105/barrel, up roughly 44% since before the conflict started. The Strait of Hormuz disruption is the core issue — about 20% of global oil supply normally flows through there, and that's been severely disrupted since late February. Gas was $2.98 before the war and it's now $4.06 on average.

    The inflation picture is what's keeping economists nervous. CPI already hit 3.3% in March, highest since mid-2024. Some forecasts have PCE hitting 4% by year's end, which would be double the Fed's target. Rate cuts that were expected this year are likely off the table.

    So yeah, the economy is holding up a bit better than feared, but the pain at the pump is real and probably isn't going away anytime soon, as it will take time for things to recover.

    Story with more details here

    US Economy Grew 2% Amid Iran Oil Shock
    byu/QuantumQuicksilver instocks



    Posted by QuantumQuicksilver

    34 Comments

    2. Ill-Panic-4533 on

      If this war continues, this number will go down. However, the fed is going to be injecting massive amounts of money into the market…

    3. Retropixl on

      I feel like this shock is still quite delayed in showing up within data. The same thing was being said with the tariffs but that never happened, I think this is a very different scenario though.

    4. pun_extraordinare on

      Clearly the numbers aren’t as bad as I expected so it’s FAKE and MANIPULATED!

      But, if they revise downwards – then the numbers are REAL.

    5. CapitalClimate9639 on

      Also PCE inflation came in at 4.5 percent. There’s a lot more going on under the surface as you alluded to.

    7. Resident_Window_9369 on

      No recession is correct!
      Sure there are some cracks, but there are always cracks!
      Markets will propel even higher when the job number comes out.

    8. FlyRepresentative644 on

      To be fair, Q4 GDP was like 1.5% initially, and was revised down to like .7% and then finally .5%. While 1% off doesn’t seem that crazy, it is a pretty large amount when you consider the original number. The initial reading on jobless claims and other data (not just during this administration btw) always seems to be heavily revised. It’s almost like they should wait to even put out an original number.

    9. steamcube on

      Stating just GDP is useless.

      Is that nominal or real GDP? If nominal, this means nothing.

    12. Technical_Tank7174 on

      It will take a lot more than gas to knock down the us economy. Im just surprised that government shutdown didn’t do more damage than it did

    14. slo1111 on

      I don’t understand your oil bit.  There is alway oil in process getting to where it needs to go, and all that March held up shipping wasn’t even going to get where it needed to go for the most part until q2.

      Way too early to have much of a material impact on q1.

    19. AltruisticOnes on

      By the way, I have beautiful oceanfront property in Arizona that I will let you have for dirt cheap!

    21. TruestoryJR on

      I wouldnt be surprised, its been business as usual in the market coupled with the fact that increased prices for essential goods and commodity transport. Although I do think this will be revised later.

    22. 92roll13 on

      The oil shock really did not start spiking until Mid March. So higher energy prices are not really factored in yet.

    26. Relative_Baseball180 on

      AI spending is saving the economy right now. It may be the only reason why we dont have a recession lol

    27. Ragebait_Destroyer on

      No, the economy isn’t holding up better than feared. Big tech is not the economy. it’s a market bubble

    28. steady_compounder on

      Feels like one of those reports where the headline looks fine but the mix underneath matters more. If growth is being propped up by temporary tailwinds while energy and inflation stay sticky, the market can still have a rough time even with a decent GDP print.

    Leave A Reply
     
    Share via
    Share via