Are prices really dropping in the US, as Trump claims?
Donald Trump boasts on social media that since the signing of a US-Iran MoU for a peace deal, oil is flowing and prices are dropping
Donald Trump boasts on social media that since the signing of a US-Iran MoU for a peace deal, oil is flowing and prices are dropping. United States President Donald Trump has taken to social media to boast about the state of the economy amid a looming peace deal between the US and Iran, which yesterday signed a memorandum of understanding (MoU) to end the US-Israel war on Iran. In a post on his social media platform Truth Social, the president claimed that “OIL IS FLOWING” and added that “THE STOCK MARKETS ARE ROARING, JOBS ARE AT RECORDS, AND PRICES ARE DROPPING (AFFORDABILITY!)” While some of his claims are accurate, others are misleading. Al Jazeera takes a look ‘Stock Market Just Hit A RECORD High’ That is true specifically for the Dow Jones Industrial Average. That index hit a record high of 51,999.67 for its close on Tuesday amid the potential of a ceasefire and a rally for the newly listed SpaceX. The Dow slipped from that high on Wednesday amid the US Federal Reserve’s announcement that it would maintain the benchmark interest rate in the target range of 3.5-3.75 percent, and closed down on Wednesday at 51,494.99. The Dow has since jumped 0.35 percent in midday trading on Thursday at 51,671. The Nasdaq Composite Index and S&P 500 both slipped. However, this may not directly impact the 38 percent of Americans who do not invest in the stock market. “The idea that the stock market is doing well does not reflect people’s experiences. There’s a saying that the stock market is not the economy, and that’s an important thing to keep in mind,” Michael Klein, professor of international economic affairs at The Fletcher School at Tufts University, told Al Jazeera.
And that lived experience is at the petrol station and at the grocery store. ‘Prices are dropping’ Petrol prices have started to tumble in the last few days. The average price of a gallon of petrol (3.78 litres) on Thursday is at $3.99, according to the American Automobile Association (AAA), which tracks daily gas prices. That’s down from a high of $4.48 in May, but still well above $2.98, where prices were on February 28 when the US and Israel first struck Iran. Despite the deal, experts believe that a petrol price decline will plateau for general consumers as the US strategic petroleum reserve, which earlier this week reached its lowest level since 1983, is refilled, all while oil extraction and shipping bottlenecks weigh on supply chains. “The persistence of the price spikes is the key issue. Transportation, rerouting, insurance premiums, and manufacturing costs don’t normalise overnight, so even when oil stabilises, the cost base across the supply chain will stay elevated,” Tammy Kulesa, director of product marketing for supply chain execution at Blue Yonder, a supply chain management firm, said in remarks provided to Al Jazeera. Mark Jones, professor of political science at Rice University in Houston, Texas, says prices will not return to prewar levels until the last quarter or close of 2027. “Even once everybody believes the truce is going to hold [and] there’s no danger going through the Strait of Hormuz, those tankers take months to reach their final destination and come back,” Jones told Al Jazeera. “So the ability to replenish the stocks is going to take until, I think, the early fall [third quarter].” Consumer inflation, which has jumped at the fastest pace in three years and is at 4.2 percent, has driven prices up on several key goods and has weighed on consumers.
The BriefWire