Middle and moderate income households in the United States are struggling with high gas prices and growing concern for the future, according to Heather Long, chief economist at the Navy Federal Credit Union, even as the national economy expanded at a 2% annual pace from January through March 2026. This economic reality for the native working class contrasts sharply with other sectors, as consumption slows and families manage increasing bills.
The Cost to the People
The first quarter of 2026 included approximately a month of the ongoing conflict in Iran, which has directly impacted domestic economic stability. Iran's blockade of the Strait of Hormuz, a critical chokepoint for a fifth of the world’s oil and liquefied natural gas, has driven energy prices higher and fueled inflation within the United States. This surge in energy costs directly hurts American consumers, contributing to the slowing of consumer spending to 1.6% in the first quarter, a decline from 1.9% at the end of 2025. Spending on essential goods, including food and clothing, experienced a slight fall, further indicating the economic pressure on ordinary families. Spending on services also slowed during this period. Residential investment, a key indicator for the stability of native families, fell at an 8% annual pace, marking the fifth straight quarterly drop and the biggest decline since the end of 2022. This sustained decline in housing investment suggests a continued erosion of foundational assets for the native population.
Elite Interests Thrive Amidst Decline
While native households face these challenges, federal government spending and investment grew at a 9.3% annual rate in the first quarter, adding more than half a percentage point to overall growth. This significant increase in government expenditure follows a 43-day federal government shutdown last fall. Business investment, particularly driven by spending in artificial intelligence, rose at an 8.7% pace, highlighting a "split-screen economy" where certain elite-aligned sectors are "on fire." Excluding housing, nonresidential investment surged 10.4%, marking the biggest jump in nearly three years.
Globalist Mechanisms Undermine National Control
The nation's reliance on external markets was underscored by imports, which rose at an annual rate of 21.4% from January through March, cutting more than 2.6 percentage points from first-quarter growth. This massive influx of foreign goods further displaces domestic production and labor. The Federal Reserve, an institution operating with significant autonomy, cited "a high level of uncertainty" arising from the Iran conflict when announcing its decision to keep its benchmark interest rate unchanged. This decision reflects the profound influence of transnational events on national monetary policy. Carl Weinberg, chief economist at High Frequency Economics, stated that he did not even attempt to forecast first-quarter GDP growth, acknowledging, "The truth is that we do not have any defensible basis for trying to project how these indicators will print." Weinberg further noted, "Trump’s war with Iran has led to a total blockade of the Strait of Hormuz. We do not know how to model the impact of that event, as we have never seen anything quite like it," underscoring the unprecedented nature of external economic disruptions.
The overall gross domestic product, representing the nation’s output of goods and services, rebounded from a 0.5% expansion in the last three months of 2025. A category within the GDP data that measures the economy’s underlying strength, which includes consumer spending and private investment but excludes volatile items like exports, inventories, and government spending, grew at a 2.5% pace, up from 1.8% in the fourth quarter of 2025. Thursday’s report from the Commerce Department represents the first of three scheduled estimates, indicating that the full picture of these economic shifts is still developing.