US Retail Sales at Risk of Decline Due to Prolonged War with Iran
Washington (ANTARA) - US retail sales in February 2026 recorded an increase, but this could change next month if the war with Iran drags on, as warned by experts.
US retail sales rose 0.6 per cent in February compared to the previous month, according to the US Census Bureau under the Department of Commerce on Wednesday (1/4) in a monthly report.
However, the report was compiled before the outbreak of war in Iran – now entering its fifth week – and experts say that retail sales next month could decline.
“I don’t see any way to avoid higher inflation and slower sales growth. The only question is how much,” said Dean Baker, one of the founders of the Center for Economic and Policy Research, to Xinhua.
During the war with the US and Israel, Iran has caused severe disruptions to shipping flows in the Strait of Hormuz. As a result, oil prices have surged, and economists estimate that inflation could rise this year.
Gary Hufbauer, a non-resident senior fellow at the Peterson Institute for International Economics, told Xinhua that he believes oil prices will remain around $100 per barrel for almost the entire year. Therefore, he predicts inflation will approach or even exceed 4 per cent due to the war with Iran.
Despite frequent statements from US President Donald Trump that the war will end soon, experts note that ending the conflict may be more difficult than the president believes.
Trump said the two countries are currently in talks, although Tehran denies it.
Trump once floated the idea of withdrawing from the conflict without resolving the trade disruptions in the Strait of Hormuz, which is the route for 20 per cent of the world’s oil.
Without restoring the strait to its pre-war normal activity, oil prices could remain high for a longer period, experts say.
“I don’t think anyone thinks oil prices will return to pre-war levels, even if the strait is reopened tomorrow,” Baker said.
This disruption could also trigger other supply shortages.
There will be a shortage of fertiliser for planting worldwide, meaning worse harvests, unless the Strait of Hormuz is reopened soon, Baker said.
A report on Tuesday (31/3) stated that the national average petrol price in the US rose above $4 per gallon for the first time since 2022. Americans are increasingly showing negative reactions to the US economy as the war continues, according to polls.
A CNN poll released on Wednesday showed that around two-thirds of Americans say Trump’s policies have worsened economic conditions in the US.