The Iran war has cost the average U.S. household the equivalent of almost $2,000, top economist says

Key Points:

• The Middle East conflict has led to significantly higher fuel prices, with gasoline up 45% and diesel up 68% compared to prewar levels, directly impacting motorists and contributing to overall inflation through increased transportation costs.
• Airline ticket prices have risen about 22% over the past year due to higher jet fuel costs and reduced flight schedules, with airlines maintaining elevated fares amid ongoing fuel price volatility and capacity cuts.
• Grocery prices have seen a modest increase of around 2.4% this year, with rising costs for diesel, fertilizer, and refrigeration absorbed partially by retailers to avoid further consumer strain after years of food inflation.
• Footwear prices rose 3.4% over the past year, driven by petrochemical-based material costs and geopolitical uncertainties, with industry leaders warning that retail shoe prices are likely to keep increasing into 2027.
• Transportation and shipping costs have risen sharply, with freight service prices up nearly 20%, leading to higher package delivery fees and expected sustained elevated shipping expenses during the holiday season despite potential easing of fuel prices.