US weekly jobless claims remain low; monthly inflation picks up in February

Economists expect further price pressures in March due to the US-Israel war with Iran

Apr. 9, 2026 at 3:06pm

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An extreme aerial view of a dense urban skyline, with rows of identical skyscrapers stretching out to the horizon, conveying the scale and complexity of the American economy.As economic uncertainty rises amid global conflicts, the U.S. labor market and consumer spending face heightened pressures.Washington Today

New applications for U.S. unemployment benefits increased moderately last week, showing no signs of labor market deterioration. Headline inflation picked up on a monthly basis in February, and economic growth almost braked in the fourth quarter. Economists expect that price pressures increased further in March as the U.S.-Israel war with Iran drove up the cost of energy and other products.

Why it matters

The war with Iran has added another layer of uncertainty for businesses that spent last year trying to navigate a constantly shifting tariffs landscape. While the labor market remains stable so far, economists are watching for shifts in consumer spending in the aftermath of the recent stock market selloff and rise in gasoline prices, as these could impact the labor market.

The details

Initial claims for state unemployment benefits rose 16,000 to a seasonally adjusted 219,000 for the week ended April 4. Headline inflation picked up 0.4% in February after an unrevised 0.3% gain in the prior month. Excluding the volatile food and energy components, the PCE Price Index also increased 0.4% in February for a second straight month. Consumer spending rose 0.5% in February after increasing 0.3% in January, but was inflated by high prices.

  • The U.S. central bank tracks the PCE price measures for its 2% inflation target.
  • The government will release the CPI report for March on Friday.
  • The minutes of the Fed's March 17-18 policy meeting showed a growing group of policymakers felt last month that interest rate hikes might be needed to counter inflation.

The players

Nancy Vanden Houten

Lead U.S. economist at Oxford Economics.

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What they’re saying

“The war has increased the downside risks to the labor market and we think it's too soon to assume that the ceasefire announced earlier this week will last and to say those risks have abated.”

— Nancy Vanden Houten, Lead U.S. economist

What’s next

Economists are bracing for a jump in inflation in March, with the Consumer Price Index expected to increase about 1.0% on a monthly basis, translating to a year-on-year rise of about 3.3%. The government will release the CPI report for March on Friday.

The takeaway

The war with Iran has added further uncertainty to the economic outlook, with concerns about its impact on inflation, consumer spending, and the labor market. While the labor market remains stable so far, economists are closely monitoring the situation for any signs of deterioration.