Courtney Brown

The job growth numbers have been some of the lowest that I've ever seen, but still the unemployment claims are also low.

Unemployment is likely to rise, says Moody's Mark Zandi, as employers feel the pain of soaring energy prices and slower growth.

Zandi sums up the current state of the economy this way.

So far, the damage is manageable, but it's mounting.

Is he talking the R word on the horizon?

Yeah, I think recession is a real risk.

If the war and all its disruptions continue for another month.

I'm Mitchell Hartman for Marketplace.

Rewind to just before the U.S.

and Israel launched strikes on Iran, and consumer sentiment was improving.

Joanne Xu runs the University of Michigan's Consumer Sentiment Survey.

She saw a sharp trend reversal after the bombs started falling.

By the time the survey closed on March 23rd, overall sentiment was down 6%.

Meaning consumers expect the Iran conflict to resolve relatively quickly.

And that may be why, for now, consumer behavior has not changed much.

Carnival Cruise Lines, for example, just reported banner bookings.

Bank rate analyst Ted Rossman is still concerned, though, because the University of Michigan's sentiment survey showed a 9% drop among higher-income consumers, threatening the K-shaped economy.

Eventually.

For now, the economy is still strong, Rossman says.

Another warning sign is the rise in consumers' inflation expectations from 3.4 to 3.8 percent a year from now.