Jobs report shows hiring slowed as Iran war took hold

Hiring slowed in April as a rise in fuel prices hammered shoppers weeks into the war with Iran, U.S. government data on Friday showed.

The U.S. added 115,000 jobs in April, according to the report, which marked a cooldown from 178,000 jobs added in March. The reading for April exceeded economists' expectations.

The unemployment rate held steady at 4.3% in April, the Bureau of Labor Statistics (BLS) said. Unemployment remains low by historical standards.

The U.S. Bureau of Labor Statistics (BLS) collected the previous month's survey data through the second week of March, before the full effects of the oil shock set off by the war.

The fresh data arrived as the war continues to drive up gasoline prices and borrowing costs, threatening a drag on the economy.

The U.S. added an average of about 15,000 jobs per month in 2025, BLS data showed. That performance indicated a drop-off from 186,000 jobs added each month in 2024.

The Middle East conflict, which began on Feb. 28, prompted Iran's effective closure of the Strait of Hormuz, a critical waterway that facilitates the transport of about one-fifth of the worldwide supply of oil.

The U.S. is a net exporter of petroleum, meaning the country produces more oil than it consumes. But since oil prices are set on a global market, U.S. prices move in response to swings in worldwide supply and demand.

The price of an average gallon of gas stands at $4.54 as of Friday, marking an increase of $1.56 per gallon since the war started, AAA data showed. That amounts to a roughly 50% jump in about two-and-a-half months.

In theory, a prolonged oil shortage could drive up prices for a vast array of goods, sapping energy from consumer spending, which powers most of the nation's economic growth.

A potential jump in costs for additional goods delivered through the Strait of Hormuz -- such as fertilizer and diesel fuel -- could also raise prices beyond gasoline, putting pressure on the Federal Reserve to hike interest rates in an effort to quell inflation.

Last month, Fed Chair Jerome Powell described the economic outlook as "highly uncertain."

"We're kind of waiting to see what happens with events in the Middle East," Powell said.

The Fed has opted to hold interest rates steady at three consecutive meetings since the outset of 2026. Before that, the Fed cut interest rates a quarter-point three straight times.

The benchmark interest rate stands at a level between 3.5% and 3.75%. That figure marks a significant drop from a recent peak attained in 2023, but borrowing costs remain well above a 0% rate established at the outset of the COVID-19 pandemic.

If the Fed moved to raise interest rates, it would hike borrowing costs for many consumer and business loans, risking a slowdown in hiring.

Markets peg a roughly 70% chance of interest rates holding steady for the remainder of this year, according to the CME FedWatch Tool.