The Iran war has caused the biggest disruption of global oil supplies in history and sent average U.S. gasoline prices surging past $4.50 a gallon this week.
But the conflict hasn’t done much damage to the American job market – at least not yet.
When the Labor Department’s report on April hiring and unemployment comes out Friday, it’s expected to show that U.S. companies, nonprofits and government agencies together added 65,000 jobs last month, according to a survey of forecasters by the data firm FactSet. That would be down from a surprisingly strong 178,000 in March.
Ordinarily, 65,000 net new jobs a month would be unimpressive. But these are not ordinary times. Baby Boomer retirements and President Donald Trump’s immigration crackdown mean that fewer people are competing for work and that the economy doesn’t need to generate as many jobs as it used to.
Matthew Martin of Oxford Economics says the so-called break-even point — the number of new jobs required each month to keep the unemployment rate from rising — is now near zero. The jobless rate is expected, in fact, to have remained at a low 4.3% in April, according to FactSet.
After the U.S. and Israel launched their attacks Feb. 28, Iran shut down the Strait of Hormuz, through which about a fifth of the world’s oil and liquefied natural gas passes. The disruption has caused a painful increase in the price of energy and led many economists to downgrade their estimates for global and U.S. economic growth.
But the fallout isn’t showing up yet in the U.S. job market.
Payroll processor ADP reported Wednesday that private employers added a solid 109,000 jobs in April. The ADP figure isn’t a reliable guide to what the Labor Department will report Friday – but the pace of hiring it showed was the fastest since January 2025. And on Tuesday the Labor Department reported that a measure of gross hiring – before subtracting those who left or lost their jobs – was stronger in March than it had been in more than two years.
The economy is getting a boost from big tax refund checks this spring, arising from Trump’s tax cut legislation last year; the refunds allow consumers to spend more freely, giving companies an incentive to add workers in response to rising sales.
The job market is showing intermittent signs of recovery after a bleak 2025. Employers last year created just 9,700 jobs a month, fewest outside a recession year since 2002. High interest rates and uncertainty over Trump’s economic policies held back hiring.
There’s been progress this year, but it’s been uneven — two strong months of job growth (160,000 new jobs in January and 178,000 in March) and one bad one (employers cut 133,000 jobs in February).
U.S. hiring, though, has been dominated by one industry: Healthcare companies, catering to an aging American population, have added 360,000 jobs over the past year; other employers have combined to cut 120,000 over the 12 months that ended in March.
Diane Swonk, chief economist at the KPMG accounting and consulting firm, warns that the healthcare hiring boom may not last.
The Republican Congress last year allowed subsidies for health insurance under the Affordable Care Act (Obamacare) to expire. Trump’s tax bill slashed Medicaid spending for the poor, and his administration has imposed a $100,000 fee on H-1B visas. “Rural and poor urban hospitals rely most on H-1B doctors and nurses to fill open positions,” Swonk wrote in a commentary Monday. “They cannot afford the new $100,000 fee for visas. Many rural hospitals have already closed.”
Going forward, Oxford’s Martin wrote in a commentary Wednesday, “the question is whether the war will reverse (hiring) momentum. Heightened uncertainty impacts the labor market with a lag, and the fiscal stimulus from higher refunds will eventually wane, particularly as gas prices remain elevated.”
—Paul Wiseman, AP Economics Writer
