U.S. gasoline hits $4 per gallon. Recession indicator flashing red. Demand destruction spreads across US economy through seven channels

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U.S. gasoline hits $4 per gallon, highest since 2022, as Iran war drives up fuel prices

U.S. gasoline prices have surged above $4 per gallon for the first time in more than three years, as the oil supply shock triggered by the Middle East war rapidly drives up costs for families.

Prices at the pump hit a nationwide average of $4.018, the highest level since August 2022 when Russia’s war against Ukraine shook energy markets, the travel association AAA said. Gas prices have soared more than 30% since the U.S. and Israel attacked Iran in late February, according to AAA data.

“We foresee potential for a disruption to the American fuel supply,” Lee Zeldin, head of the Environmental Protection Agency, told reporters at S&P Global’s CERAWeek conference in Houston last week. The EPA is temporarily lifting some regulations to increase gas supplies in an effort to ease prices.

A Walmart-related recession indicator that’s preceded the last 4 economic downturns is flashing red

An indicator linked to Walmart, one of the US’s most iconic economic stalwarts, is flashing a possible recession warning, according to a Wall Street veteran.

Jim Paulsen — a longtime economist and the former chief investment strategist of the Leuthold Group — maintains the Walmart Recession Signal (WRS), which measures Walmart’s stock price against a basket of luxury stocks. The general idea is that the higher the gauge goes, the more risk there is of a sharp economic downturn.