Latest / Best of: Features / Retail price impacts from the Iran war are uneven but add up for US households before midterms

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Retail price impacts from the Iran war are uneven but add up for US households before midterms · Best of: Features

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  Retail price impacts from the Iran War are uneven but add up
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  for US households before midterms. Written by Kathy Busowitz, Wyat Grantham Phillips,
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  Rio Yamot, D. Ann Durbin, Anne Dinasencio, and May Anderson. This article
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  is being read by an automated voice generated by Everlett. New York,
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  the AP. More than seven months into the US war with Iran,
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  sharply higher fuel prices are making it more expensive to drive and
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  fly, and adding to the cost of some goods prolonging the strain
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  on American households as the midterm elections approach. Motorists and airline passengers
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  have borne the clearest consequences as the fighting disrupts Middle East oil
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  shipments. Some companies have raised delivery charges or prices on selected products,
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  yet the higher cost of making and moving goods has not translated
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  into across the board price increases at stores. Shoppers may not be
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  spared indefinitely, though, many companies have absorbed at least part of their
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  higher production and transportation costs. A September jump in wholesale prices suggests
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  some businesses may eventually charge more if fuel prices, stay elevated. The
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  chief economist at Moody's Analytics, Mark Zandy, estimated this week that the
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  war has most the average US household the equivalent of almost two
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  thousand dollars, including one thousand one hundred dollars in higher energy prices,
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  five hundred and forty dollars in higher interest rates, and three hundred
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  sixty dollars in military costs. The energy portion is growing by fifty
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  dollars a week at current fuel prices, Zandy said. Here's a look
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  at price changes since the war began, and which goods and services
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  could be most susceptible to increases in the months ahead. Filling up
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  fuel tanks is noticeably more expensive. Before the war, regular gasoline averaged
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  two dollars and ninety eight cents a gallon nationwide and diesel three
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  dollars and seventy six cents almost eight months ago, according to AAA
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  gas peaked at four dollars and fifty six cents in May, below
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  its twenty twenty two record, while diesel reached a record six dollars
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  and fifty three cents in September. What's wretched consumers? On Friday, the
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  national average stood at for dollars and thirty three cents a gallon
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  for gasoline, or forty five percent above its pre war level, and
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  was up sixty eight percent for diesel at six dollars and thirty
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  three cents, Triple a reported. Gas typically costs less in the fall,
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  and this is the first October a gallon of regular gas has
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  cost more than four dollars on average, it said. Expensive diesel is
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  less apparent to most U.S. Residents but contributes to overall inflation by
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  raising the cost of moving goods. What come next? Shipping through the
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  Strait of Hormuz remains dangerous and constrained, prolonging uncertainty over oil supplies
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  and fuel prices. The Energy Information Administration said this month that it
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  expected winter heating costs to be twenty one percent higher for the
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  roughly three percent of households that rely on heating oil, most of
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  them in the northeast, assuming the weather is mild. Higher airfares are
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  hard to escape too. Before the war, jet fuel averaged 99 a
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  barrel worldwide before the war, doubled to 209 in April, and climbed
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  back to nearly 195 in September after a spring decline, according to
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  the International Air Transport Association. What's reached consumers? Airlines have raised
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  ticket prices and fees, trimmed schedules and shelved plans to add flights.
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  Airfares cost about twenty two percent more in September than THE did
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  a year earlier, the Consumer Price Index showed. Average domestic airfares rose
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  from four hundred and five dollars in late twenty twenty five to
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  four hundred and forty false bollar dollars in the April through June
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  period of this year's excluding optional fees, according to the US Bureau
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  of Transportation Statistics. What could come next? Fuel price volatility makes it
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  harder for airlines to plan and could discourage them from lowering fares
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  even when fuel prices start to fall, analysts said. United Airlines pulled
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  some December flights and warned of further possible cuts in 2027. Fewer
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  available seats could mean less pressure to hold ticket prices down. Higher
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  fares have covered substantial portions of higher fuel costs for domestic airlines,
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  but not enough to prevent a squeeze on their third quarter profits,
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  according to consensus estimates. Any growth in grocery prices pains Americans after
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  multiple years of food inflation. Before the war, the U.S. Department of
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  Agriculture initially expected grocery prices to rise one point seven percent this
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  year, below the historical annual average. USDA now expects a still comparatively
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  modest two point four percent increase. What has wretched consumers? Individual food
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  prices can be volatile, and it's not clear how much of this
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  year's expected increase is due to the war, and how much is
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  due to other factors, including tariffs, unfavorable weather, and higher labor costs.
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  Cornell University Economics Professor Chris Barrett said he was surprised grocery prices
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  haven't risen faster given higher costs for diesel, fertilizer, and refrigeration. USDA
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  revised its 2026 fertilizer cost estimates for major crops upward by 9
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  to 13, and fuel, lubricant, and electricity estimates by 33 to 41.
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  Barrett suspects retailers are absorbing some increases to avoid alienating fed up
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  customers after multiple years of food inflation. Grocery price in September were
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  about twenty two percent higher than five years earlier. What could come
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  next? Experts have warned that fresh produce and other frequently replenished perishables
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  could respond quickly to higher transportation and refrigeration costs. Barrett sees very
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  little prospect of a significant reduction in fuel prices that could ease
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  the pressure on farmers and truckers. A strengthening El Niño weather pattern
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  could damage crops through drought, heat, or flooding, the UN Food and
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  Agriculture Organization warned. That could lift commodity prices, although ample inventories and
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  good harvests elsewhere may limit the impact on groceries. Rubber meets the
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  road when it comes to shoe prices. Before the war, nearly all
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  shoes sold in the US are imported, and roughly seventy percent of
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  the materials in a synthetic shoe are petrochemical based, according to footwear
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  distributors and retailers of America. The industry trade group opposed Trump administration
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  tariffs last year. What has rich consumers? Footwear prices were three point
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  four percent higher in September compared to twelve months earlier, according to
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  the Consumer Price Index. Men's shoes went up the most by for
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  point five percent. What come next? While import costs are down from
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  a year ago, the Footwear Trade Group said oil prices, tariffs, and
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  geopolitical uncertainty are likely to keep retail shoe prices rising into twenty
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  twenty even Footwear companies are working hard to keep shoes affordable, but
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  there is a limit to how much additional cost businesses can absorb
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  before those pressures reach consumers, FDRA president and CEO Matt Priest said.
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  Transportation costs add up throughout product supply chains Andy Before the war,
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  the cost of moving goods and delivering packages was already increasing and
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  depended on more than fuel. What has wretched consumers? It's not clear.
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  September producer price data showed that transportation and warehousing of goods sold
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  to businesses, as inputs cost ten point two percent more than a
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  year earlier. Prices for truck and water freight services each rose nineteen
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  point three percent. The indexes measure what transportation providers charged, but do
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  not show how much of the increase appeared in retail prices. Consumers
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  have felt the higher costs most directly when sending packages. The US
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  Postal Service raised base prices 8 in April for Priority Mail Express,
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  Priority Mail, Ground Advantage, and Parcel Select, citing increased transportation costs. UPS,
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  FedEx, and DHL also impose fuel surcharges on many shipments. What could
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  come next? Shipping costs could remain elevated during the holiday season even
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  if oil prices ease. Third party provider AFS Logistics and Financial Services
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  Company, T D. Cowan Project Record Parcel costs this quarter and the
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  highest truckload rate since early 2022. We expect fuel to drive elevated
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  transportation costs for the foreseeable future, AFS logistics CEO Andy Dyer said.
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  Although UPS and FedEx surcharges could decline if diesel and jet fuel
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  prices fall, changes to carrier surcharge formulas, holiday fees, and tight trucking
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  capacity could keep total shipping bills elevated, AFS said. Grantham Phillips contributed
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  from Chicago, Yamet from Las Vegas, and Durban from Detroit.