Government report to show how US economy performed amid Iran war - ABC News
By Imani Sutton · Reporting from Atlanta ·
The narrative coming out of Washington this week—that the U.S.
The Grid Always Fails When the Price Goes Up
The narrative coming out of Washington this week—that the U.S. economy remains "resilient" despite a geopolitical powder keg in the Strait of Hormuz—is pure press-release futurism, and I am allergic to it. What we are being fed by The Commerce Department is not a story of resilience; it’s a ledger showing how much cost inflation has been dumped onto the consumer while GDP growth stalls. According to reports from CNBC and ABC News, the U.S. economy slowed to 1.5% in Q2, down from the previous quarter's 2.1%. Meanwhile, core PCE prices held at 3.3%, a rate that is more than percentage point higher than the Federal Reserve’s target of 2%. The Fed, led by Kevin Warsh, was predictably useless, holding rates steady after a divided vote (9-3), seemingly convinced that sheer force of will and enough AI spending—which ABC News noted accounted for roughly two-thirds of GDP growth in H1 2025—can paper over the cracks.
The Price Shock is Always the System Failure
The mechanism at play here is not new, nor is it solved by a higher interest rate or a better algorithm. This pattern echoes the profound disruptions of the 1973 oil crisis. In both instances, geopolitical conflict disrupts commodity supply chains—the energy shock in '73; the Strait of Hormuz closure now—creating price spikes that simultaneously drive inflation and decelerate overall economic growth. The sheer fact that national average prices for a gallon of gasoline soared to $4.56 in May, as ABC News reported, demonstrates this perfectly: massive inflationary pressure is not an abstract number on a graph; it’s the cost of moving goods through infrastructure that was never designed for such volatility.
Where Does the Cost Go When the Lights Flicker?
The data shows consumer spending continued to climb (final sales rose 3.9%), but personal savings declined to 2.7%, hitting a four-year low, according to CNBC. The money isn't going into building better grids or fixing aging water mains; it’s being sucked up by the cost of energy and goods that are priced by global conflict. When you combine elevated inflation with decelerating growth, the burden always falls on those who live paycheck to paycheck—the people whose lives depend on a utility bill they can read line by line. The system is built for frictionless consumption, but when the commodity supply chain breaks down, the whole house of cards stalls.
The American economy isn't resilient; it’s brittle. It operates on an assumption of stable energy flow and predictable pricing that the world has proven impossible to maintain. Until we stop treating infrastructure—whether it’s a power grid or a reliable water source—as an infinite commodity subsidized by geopolitical stability, every "resilient" report is just a delay notice for the next inevitable collapse.
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US gross domestic product. Source: Federal Reserve Economic Data (FRED).