Zandi Estimates Iran War Has Cost Nearly $2,000 per US Household

Moody’s Analytics chief economist Mark Zandi estimated that the Iran war has cost the average American household nearly $2,000 since it began, totaling $265 billion nationwide.

In a series of posts on X on Oct. 12, Zandi attributed about $1,100 per household to higher energy and transportation costs, $540 to higher interest rates, and $360 to military spending. He said energy costs alone continue to rise by about $50 per household each week at current fuel prices.

“Consider that the war’s costs taken together have absorbed about half the average American household’s income gain over the past eight months. No wonder the war is so unpopular,” Zandi said on X.

The White House defended taking action to stop Iran from getting a nuclear weapon.

“Mark Zandi is a Democrat donor who is frequently wrong—including predicting multiple recessions that never happened,” White House Principal Deputy Press Secretary Anna Kelly said in a statement. “President Trump is rightfully ensuring that Iran, a country that for 47 years chanted ‘Death to America,’ can never have a nuclear weapon. Many politicians have talked about taking action to protect the United States from a nuclear Iran, but no one had the courage to address it until President Trump.”

U.S. and Israeli strikes on Iran began Feb. 28.

“Higher energy prices are contributing most to the costs,” Zandi said. “A gallon of regular goes for $4.37, up from just under $3 before the war. Diesel is above $6, and jet fuel has nearly doubled. As winter approaches, the much higher price of home heating fuel is also adding to the costs.”

Zandi said the war’s inflation contributed to the Fed’s decision last month to raise rates and signal that more rate increases are coming.

“Long-term rates are also up a lot—fixed mortgage rates have climbed from below 6 percent before the war to 7.5 percent. By our reckoning, the higher rates have cost the economy about $540 per household,” he said.

In September, the Congressional Budget Office estimated the war cost the U.S. military $38.1 billion through Aug. 1. With fighting expected to continue, the war was estimated to cost between $2 billion and $3 billion each month, depending on its intensity.

On Oct. 5, the Congressional Research Service published a report listing some of the major equipment losses during the war.

The report listed 81 fixed-wing or rotary-wing aircraft, including drones that were lost or damaged during the conflict.

The Congressional Budget Office estimated the cost of equipment losses as of Aug. 1 to be between $1.9 billion and $3.3 billion, depending on the Department of War’s plans for replacement.

Democrats have continually pointed to the cost of the war in their criticism of Trump.

In September, 46 Democratic or left-leaning Independent Senators sent a letter to Department of War Secretary Pete Hegseth demanding more information on the costs of the war.