Iran War Elevates US Recession Risk, Economists Warn

Claudia Sahm, chief economist for New Century Advisors, and Mark Hamrick, senior economic analyst at Bankrate, emphasize the conflict's duration and severity as critical factors. Hamrick estimates a near 50-50 likelihood of a recession within 12 months, driven by rising crude oil, gas, jet fuel, and diesel prices, which will impact food and building materials costs.

While job growth has slowed and consumer sentiment, as measured by the University of Michigan, fell 6% from February to March, other indicators like manufacturing activity and broad consumer spending remain resilient, according to Elizabeth Renter of NerdWallet and Lydia Boussour of EY. Economists Chris Martin of Glassdoor and Guy Berger note that despite cooling inflation, new shocks like the war and tariffs pose continuous threats, with Berger describing the job market as "sickly" despite stable unemployment rates.

Americans feel economic pressure from affordability challenges and climbing gas prices, even without an official recession, a sentiment echoed by Hamrick and Sahm, who warns a crisis of confidence could trigger a downturn.