Trend watch
Apparently the fourth time is the charm – Congress finally enacted the funding for most of the Department of Homeland Security, ending a record 76-day shutdown at the agency. The amazing part was that the House passed the measure via a voice vote, meaning there was practically no opposition from either party.
We’ll continue to include the personal tax refunds chart (slide 7, available to clients in the full report) for two more weeks, which is the end of tax filing season. Interestingly, the number of current-year tax returns are already 5.1% above the same point last year, or 4.4 million more returns.
We’re also keeping a keen eye on gasoline prices. The national average has climbed to $4.39 per gallon, which is the highest since July 2022. On slide 8, we updated the state-level gasoline price map, which illustrates the wide variances by state.
Our take
The Iran War talks are using shuttle diplomacy, which is a method of negotiation utilizing an intermediary that travels back and forth between two or more parties. Unfortunately, shuttle diplomacy tends to be messier as it typically drags out the timeline and generally contributes to false starts and head fakes.
Despite the Middle East cease‑fire agreements largely holding, U.S. crude oil prices surged back above $100 per barrel this week. That’s translated into the aforementioned resurgence in the national average of gasoline. Alas, the pain at the pump remains an ever-present real-time reminder for Americans that the Iran War and the Strait of Hormuz issue isn’t resolved.
Meanwhile, the U.S. economy has continued to power through this uncertainty. This week’s evidence was the news that the U.S. economy grew 2.0% on an annualized basis in the first quarter of 2026, rebounding sharply from the very soft 0.5% pace during the fourth quarter. Of course, gross domestic product (GDP) was negatively impacted by the government shutdown, which caused a dramatic decline in federal military spending.
Furthermore, the composition of first quarter GDP showed that the gale force behind tech spending – for artificial intelligence (AI) – appears to be taking the baton in terms of being a growth driver for the U.S. economy.
Similarly, corporate earnings have continued to improve based on first quarter earnings reports. Moreover, a significant chunk of companies have increased earnings guidance for the coming quarters.
These trends highlight the notion that the Iran War and crude oil prices matter, but other things matter more to the U.S. economy.
Bottom line
The U.S. economy continues to power through the uncertainty caused by the Iran War and the subsequent spike in gasoline prices. Important drivers – such as AI-led tech investment – have taken the lead as a key growth engine, while improving corporate earnings and rising guidance suggest oil risks matter, but aren’t the dominant force shaping the U.S. economy.
Our full report is reserved for clients only. Let’s work together.
A caring advisor can help you uncover opportunities and take on challenges—and provide greater confidence, clarity, simplicity, and direction.