- Employers added an average of 92,000 jobs a month in 2026, compared to less than 10,000 last year.
- Unemployment held steady at 4.2% in June, with low layoffs.
- A ceasefire reduced gas prices by nearly 50 cents a gallon in June, but prices have risen back over $4 due to renewed hostilities.
- The biggest downside risk facing the economy is the war with Iran and the situation in the Strait of Hormuz, where 20% of the world’s oil and natural gas passes through.
- The U.S. economy is facing an uncertain future due to a return to fighting in Iran and potential rate increases from the Federal Reserve later this year.
The U.S. economy has shown resilience, growing at a 1.5% pace in the second quarter of 2026, despite facing challenges from inflation and geopolitical tensions.
Consumer spending, which constitutes 70% of economic activity, increased by 3.2% in the same period, while job growth averaged 92,000 per month, a significant rise from last year’s less than 10,000 jobs added monthly.1
However, the economy's outlook is clouded by the ongoing conflict in Iran, particularly concerning the Strait of Hormuz, a critical passage for 20% of the world’s oil and natural gas.45
The unemployment rate remains steady at 4.2%, with low layoffs, but inflation continues to exceed the Federal Reserve's 2% target, complicating monetary policy.2
A recent ceasefire temporarily reduced gas prices by nearly 50 cents per gallon, but renewed hostilities have pushed prices back over $4, according to AAA.3
As the Federal Reserve considers potential rate increases, the economy's resilience will be tested against these mounting risks.
“Unemployment held steady at 4.2% in June, with low layoffs, indicating a stable labor market despite economic uncertainties. Additionally, a ceasefire initially reduced gas prices by nearly 50 cents a gallon in June, but renewed hostilities have pushed prices back over $4, raising concerns for consumers.”
WLOS
