“Running on Empty,” Jackson Browne’s 1977 hit, was about a feeling everyone knows: running on fumes. That feeling describes today’s economy. Fiscal relief, excess savings, an AI‑driven investment boom, and a Federal Reserve with room to respond kept the post‑Covid expansion going through six years of shocks.

Now those cushions are spent.

The Iran war did not arrive at a resilient economy. It arrived at an exhausted one.

That war is now in its second month. The Strait of Hormuz -- through which about 20 percent of the world’s oil normally moves -- remains effectively closed. Friday’s jobs report showed 178,000 new jobs in March, a headline stronger than the underlying trend. On a three‑month basis, job growth is closer to stall speed than the headline suggests: February’s revised loss of 133,000 both drags the average down and flatters the March comparison. Much of the health‑care gain came from Kaiser Permanente strike workers returning to payrolls.

Since the conflict began, oil has surged past 100 dollars a barrel and Treasury yields have climbed roughly half a point. The S&P 500, at an all‑time high just weeks before the first strikes, has fallen more than 6 percent. Goldman Sachs, one of the more measured houses on Wall Street, now puts the 12‑month U.S. recession probability at 30 percent and rising.

...read more at realclearmarkets.com