The war in Iran has cost the average American household $2,000 so far, according to estimates that Mark Zandi, chief economist at Moody's Analytics, shared on Monday. Moody's estimates put the cost to U.S. consumers at $265 billion nationwide, with the conflict having started in late February.
Iran war has cost average US household $2,000, Moody's economist estimates
The war in Iran has cost the average American household $2,000 so far, according to estimates that Mark Zandi, chief economist at Moody's Analytics, shared on Monday. Moody's estimates put the cost to U.S. consumers at $265 billion nationwide, with the conflict having started in late February.
Zandi wrote in a post on X that the war's costs, taken together, have absorbed about half the average American household's income gain over the past eight months. "No wonder the war is so unpopular," he wrote.
Zandi wrote that energy prices are the most significant contributor to rising costs. A gallon of gasoline costs $4.34, up from $2.98 a gallon before the conflict started, CNN reported. The average cost of diesel is close to $5.8 per gallon, up from $3.1 a year ago, according to AAA.
"Altogether, that comes to close to $1,100 per household, paid at the pump and in the higher cost of everything that moves by truck or plane," Zandi wrote. By his reckoning, he wrote, higher interest rates cost the economy about $540 per household. His calculations take into account the Federal Reserve's decision to raise interest rates; fixed mortgage rates rose from below 6 percent before the war to about 7.5 percent now. The cost of military operations adds up to about $360 per household, according to his calculations.
In early May, during an appearance before the House Appropriations Committee, the Pentagon's acting chief financial officer, Jules Hurst III, told lawmakers the cost of the conflict was nearing $29 billion. In late June, the American Enterprise Institute, described in the source as a conservative-leaning think tank, estimated the cost of the operations at $38.6 billion, and the Center for Strategic and International Studies placed the cost at around $40 billion in its late-June report.
In June, the White House requested $87 billion in supplemental funding to help cover the cost of some stockpile replacements and troop deployments in the U.S. Central Command theater. The bill will likely need Democratic votes to pass in the Senate, according to the source.
- The source does not state the calendar date of the Monday on which the estimates were shared.
- The source does not state how Zandi derived the $2,000 per household and $265 billion figures, or what methodology the Moody's estimates use.
- The source does not reconcile the differing figures for military operation costs — nearing $29 billion from the Pentagon, $38.6 billion from the American Enterprise Institute, and around $40 billion from the Center for Strategic and International Studies — or state the periods each figure covers.
- The source does not state the current status of the White House's $87 billion supplemental funding request.
- The source does not state the date on which CNN reported the gasoline price comparison.
- The source does not state the exact date on which the conflict began beyond late February.