US Hiring Likely Improved Last Month, But Iran War and Oil Prices Could Take a Toll Later in 2026

Experts warn the job market rebound may be short-lived as the economy grapples with fallout from the Iran conflict.

Apr. 3, 2026 at 4:50am

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An abstract composition of overlapping triangles and rectangles in shades of blue, red, and yellow, conveying the interplay of economic factors affecting employment and the broader economy.A conceptual illustration capturing the complex economic forces shaping the U.S. job market, from the lingering pandemic to the fallout from the Iran conflict.Washington Today

The U.S. job market is expected to have rebounded in March after a dismal February, but economists warn the improvement may not last long as the economy absorbs the impact of the Iran war and surging oil prices. The Labor Department is projected to report that companies added 60,000 jobs last month, down from a loss of 92,000 in February, while the unemployment rate held steady at 4.4%. However, experts say the Iran conflict and resulting energy price hikes could weaken the job market in the coming months, with one forecaster predicting the jobless rate will rise to 4.6% by year-end.

Why it matters

The U.S. job market has been in a slump, with employers adding an average of just 9,700 jobs per month in 2022, the weakest hiring outside of a recession since 2002. Businesses have been hesitant to bring on new workers due to economic uncertainty, and there are growing concerns that artificial intelligence is taking over entry-level positions. The fallout from the Iran war and oil price surge could exacerbate these challenges, making it harder for workers to find jobs and putting a damper on the overall economy.

The details

The Labor Department is expected to report that companies, government agencies and nonprofits added 60,000 jobs in March, a rebound from the 92,000 jobs lost in February. The unemployment rate is projected to hold steady at 4.4%. Factors contributing to the March job gains include warmer weather and the return of 31,000 Kaiser Permanente employees to work after a February strike. However, experts warn the Iran war and resulting surge in oil and gasoline prices could weaken the job market in the coming months, with one forecaster predicting the jobless rate will rise to 4.6% by year-end. The American job market has already been in a slump, with employers adding an average of just 9,700 jobs per month in 2022, the weakest hiring outside of a recession since 2002. Businesses have been reluctant to bring on new workers due to uncertainty around trade and immigration policies, and there are growing concerns that artificial intelligence is taking over entry-level jobs.

  • The Labor Department is expected to report the March jobs data on Friday, April 5, 2026.
  • In 2022, employers added an average of just 9,700 jobs per month, the weakest hiring outside of a recession since 2002.

The players

Nancy Vanden Houten

Lead U.S. economist at Oxford Economics.

Adam Schickling

Senior economist at the investment firm Vanguard.

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What they’re saying

“the impact of the war might not be felt for some time. Changes in businesses' plans to hire and invest will take time to show up in the economic data.”

— Nancy Vanden Houten, Lead U.S. economist at Oxford Economics

“another month or two of reasonably good labor market and economic data won't be a reason to conclude that the economy isn't facing downside risks related to the war.”

— Nancy Vanden Houten, Lead U.S. economist at Oxford Economics

“Vanguard's Schickling expects healthcare and social assistance to account for 45% of hiring over the next four years, versus a historical average of just 20%. The trend reflects an aging U.S. population. A graying Japan saw the same thing in the early 2010s.”

— Adam Schickling, Senior economist at Vanguard

What’s next

The Labor Department will release the official March jobs report on Friday, April 5, 2026, providing more insight into the state of the U.S. labor market and the potential economic impacts of the Iran war.

The takeaway

The U.S. job market is facing a complex set of challenges, from the lingering effects of the pandemic to the fallout from the Iran conflict and its impact on energy prices. While a March rebound in hiring is expected, economists warn the improvement may be short-lived as the economy grapples with these emerging headwinds, underscoring the fragility of the labor market recovery.