Gasoline across King, Pierce, and Snohomish counties fell in June - the first real relief at the pump since the war with Iran sent crude oil climbing in the spring. It dropped almost ten percent in a single month nationally, the sharpest decline since 2020. Anyone filling a tank in Everett has seen the numbers fall, and the natural conclusion is that the worst has passed.
It has not. Crayons, contact lenses, aspirin, dentures, bandages, umbrellas, the casing on a keyboard, synthetic fabrics, shoes, and tires - all are products derived from oil. The United States Department of Energy estimates more than 6,000 consumer products are made from crude oil derivatives, including most plastics and synthetic materials. When the price of crude oil rises, the cost of making all of them rises with it, and unlike gasoline, those prices tend to stay high - even when the price of crude oil falls.
The Bureau of Labor Statistics tracks a category of physical goods excluding food and beverages, including products mostly made from petroleum. In the Seattle area, that category rose 6.2 percent over the year ending in June, and more dramatically, 5.1 percent since February, when the war began. Energy prices swung up and then partway back down across those same months. But goods did not swing. They climbed in price and remain high.
Delayed Impact
Costs move slowly through a supply chain. The ripple effects of rising oil prices don't reach store shelves immediately; they arrive months later, embedded in the price of a finished product. Analysts who track packaging materials put the lag at roughly three to six months from the price of crude to the price on the shelf, which is why the full effect of the war's shock is only beginning to appear now, and why it is expected to keep appearing long after fuel prices have settled.
Roughly 70 percent of the material in a synthetic shoe is petrochemical-based, and about 30 percent of that cost rises directly with the price of oil, according to the footwear industry's trade association, which estimated the war would add 1.5 to 3 percent to the price of a pair of shoes by late summer and fall, just in time for the back-to-school season. Manufacturers of medical bandages and dressings have raised prices because the adhesives are petrochemical-derived and the energy to manufacture them costs more. A passenger tire, made largely from synthetic rubber, costs 8 to 12 percent more to produce for every $10 increase in the price of crude oil. And plastic packaging rose nearly 20 percent in a single month.
Reduced Purchasing Power
In the Seattle area, the index for all items less food and energy, the core measure that strips out the volatile categories, rose 3.5 percent over the year ending in June and kept climbing into the summer. Overall prices in the Seattle area rose 4.5 percent over the same year, well above the national rate of 3.5 percent.
Wages in Everett, representing the purchasing power of local consumers, have not kept pace with these increases. A raise that looked real on paper has been absorbed by the price of the goods it was meant to buy, especially for anything made from oil. Local households already struggling to stay afloat are now falling behind because of the war.
The Cost at Home
At the start of the war, the Pentagon was spending around one to two billion dollars a day. Moody's Analytics estimates the war has cost American consumers and taxpayers about $132 billion so far, with the figure still rising. The World Bank cut its forecast for global economic growth this year to 2.5 percent, its lowest since the pandemic.
In February, Everett voters approved a new elementary school, the rebuilding of Lowell Elementary, replacing a building at Cascade High, and adding classrooms across the district, a total of $397 million. The entire bond package, the largest investment Everett residents have made in their own schools this decade, is a fraction of what was spent on war in a single day. The district's newest school, a complete rebuild of Jackson Elementary expected to open this fall, cost $54 million. That means roughly a dozen school rebuilds could have been completed for the cost of one day of war.
The administration has described the economic damage as temporary. A White House spokesperson told CBS News that the President had been clear about the temporary disruptions the operation would bring, and that the American economy remained on a solid trajectory. The economists measuring goods sold on store shelves use a different phrase. They call it "baked in".
County Deficits
Community Transit, which runs most of the buses in the county, budgeted about $17 million for fuel this year and typically uses as much as 70,000 gallons of diesel a week. It has already exceeded the per-gallon price it planned for and expects to draw on a $5.5 million reserve it keeps for unanticipated fuel costs. That reserve is public money, set aside for costs the county cannot control.
The brightly lit gas station signs will remain volatile, and prices will fall again at times. The prices on every other product were set in motion months ago, by a war no one asked for, and the bill has come due for Everett residents.