by Conerly Consulting staff
The economy is performing close to the script I laid out in my January 2026 forecast, even after a war that briefly threatened to upend it. The Bureau of Economic Analysis’s third estimate, released June 25, put first-quarter real GDP growth at 2.1%, revised up from 1.6% in the second estimate. That’s softer than the fourth quarter’s blistering pace I cited earlier this year, but still in line with the “solid growth” path I expected before the Iran war intervened.
Personal income and spending data, also released June 25, tell a similar story for May: personal income rose 0.7%, real disposable income rose 0.3%, and real consumer spending rose 0.3%. Consumers are still spending, which was the demand-side pillar of my original 2026 forecast.
The bigger story is the Strait of Hormuz, the subject of my March piece on the Iran war’s economic risks. That article described two paths: a quick reopening that would return us to the pre-war forecast, or a prolonged closure that would push the world into recession. We’re now living through a third path I flagged as possible but didn’t fully spell out: a messy, partial reopening.
Oil analyst Rory Johnston posted on X June 25 that Iran is “exerting its newly claimed control of Hormuz” after a cargo ship was hit by a projectile off Oman, even as shipping volume keeps climbing toward pre-war levels. That captures where we are: tanker traffic through the strait has been rising for weeks, but Iran is still asserting authority over who passes, and isolated attacks continue. Brent crude has fallen back into the mid-$70s as the disruption premium unwinds, exactly the direction my March forecast anticipated if the strait reopened, even imperfectly.
None of this changes my bottom-line advice to business leaders. The recession risk from oil has faded but not vanished; Iran retains leverage and continues to demonstrate it. Companies should keep functioning on 2026 baseline plans while holding onto contingency plans for energy price spikes. The GDP and income data confirm the broader economy was sound going in. The Strait of Hormuz remains the wildcard.