Trump's Job Market Shrinks as Oil Fears Mount

Combination of weakening labor market and higher energy prices poses risks for Republicans

Published on Mar. 6, 2026

Got story updates? Submit your updates here. ›

The U.S. job market has contracted, with losses spread across many sectors including healthcare and leisure/hospitality. This, combined with a surge in oil prices, poses serious risks to Republicans as they try to repair Trump's approval rating on the economy. White House officials are looking for ways to bring down gas prices, but a prolonged oil shock could push up consumer prices and make it harder for the Federal Reserve to lower interest rates.

Why it matters

A weakening labor market and higher energy prices create a 'stagflationary' scenario that could hurt the Republican party's economic messaging and Trump's approval ratings ahead of upcoming elections.

The details

The latest jobs report showed a contraction in payrolls across both the public and private sectors, with losses in industries like healthcare and leisure/hospitality. The administration is trying to address rising gas prices, including through temporary sanctions relief, but a prolonged oil shock risks pushing up inflation and making it harder for the Fed to cut rates.

  • The latest jobs report was released on March 6, 2026.
  • Retail sales fell in January 2026 as consumers pulled back from holiday spending.

The players

E.J. Antoni

The chief economist at The Heritage Foundation and Trump's first pick to lead the Labor Department's Bureau of Labor Statistics.

Scott Bessent

The Treasury Secretary.

Kush Desai

The White House spokesman.

Christopher Waller

A Federal Reserve Governor.

Gregory Daco

The chief economist at EY-Parthenon.

Got photos? Submit your photos here. ›

What they’re saying

“There's 'no way to sugar coat it, and the downward revisions still aren't fixed. And this was all BEFORE we attacked Iran and spiked energy prices.'”

— E.J. Antoni, Chief Economist, The Heritage Foundation (X)

“It's high time for the Federal Reserve to cut interest rates and stop foolishly strangling America's economic resurgence under President Trump.”

— Kush Desai, White House Spokesman (White House Statement)

“Then it'll start bleeding through to other parts of the economy. Energy is a big part; it feeds into everything else.”

— Christopher Waller, Federal Reserve Governor (Bloomberg TV)

“Let's be careful not to be excessively alarmist about a stagflationary scenario. But given the supply shocks the U.S. economy has withstood in the form of immigration restrictions, geopolitical turmoil and rising oil prices, 'stagflation does become a growing risk.”

— Gregory Daco, Chief Economist, EY-Parthenon (Politico)

What’s next

The administration is looking for ways to bring down gas prices, including through temporary sanctions relief for Indian fuel-makers regarding Russian oil. The Federal Reserve will also be closely watched to see if it decides to cut interest rates in response to the economic conditions.

The takeaway

The combination of a weakening job market and surging energy prices creates a challenging economic environment for the Republican party and the Trump administration, raising the risk of 'stagflation' and potentially hurting the party's economic messaging ahead of upcoming elections.