Oil Shock Is Latest Test Of US Economy's Resilience

The latest crude oil price spike has drawn comparisons to previous similar spikes (charts). There were six of them before the current one, since 1970. The first five coincided with recessions. The two during the 1970s caused two recessions and boosted inflation, resulting in a lost "stagflationary" decade for the stock market.

The previous spike in 2022 coincided with a bear market in stocks, but there was no recession back then. We concluded that the economy had once again demonstrated its resilience. It has been doing that since the start of the decade, when the pandemic hit, supply chains were disrupted, inflation soared, the Fed tightened, three banks failed, tariffs were imposed, and payroll employment gains dwindled.