The March jobs report, out Friday, will be the first one to include data collected since president Trump launched a war in Iran.
Data will be from the early days of the war, so it’s unlikely to have had much effect on jobs numbers. But the longer the war drags on, the more likely it is to have an impact on the labor market.
Of course, certain industries are more vulnerable than others.
As soon as the U.S. and Israel launched attacks on Iran, the price of oil shot up and gas prices followed. Angela Hanks, chief of policy programs at The Century Foundation, said as gas prices rise, consumers get stretched.
“You have to get to work, you have to pay your electric bill, and so I think we’ll see that show up as reduced demand in other sectors where people have more opportunities to make choices about whether or not they spend,” she said.
The more people have to spend on gas and heat, the less they have to spend at restaurants or on clothes or trips.
Josh Bivens at the Economic Policy Institute said job-wise, he’s most concerned right now about people who work in industries fueled by discretionary spending.
“Obvious ones are like restaurants, arts, entertainment, some travel,” he said. “That’s where people have the most ability to quickly adjust their spending, and those are also industries that are pretty quick to lay people off as soon as that spending dries up a little bit.”
The longer the war goes on, the riskier things get for other industries, too. Especially ones that rely on anything that passes through the Strait of Hormuz.
Liz Pancotti, managing director at Groundwork Collaborative, is worried about agriculture.
“About 25% of farmers had not yet purchased their fertilizer for this growing season. So that is one that is quite concerning to me,” she said.
Also concerning? Industries that rely on helium.
“Helium is obviously used for some medical supplies and for the balloons you might blow up for your children’s birthday, but more importantly, it’s used for computer chips. And right now, I am really hoping we are not staring down the chips crisis that we saw in 2021, ‘22 and ‘23,” Pancotti said.
During the height of the pandemic, companies couldn’t get enough chips for computers and cars. A repeat of that would hurt consumers and people who work in those industries.
Angela Hanks at TCF says the war is also coming on top of a lot of other stressors for businesses, including inflation, high interest rates, and tariffs.
“There’s only so many of those kinds of shocks that businesses can absorb before we start to see job loss,” she said, in multiple sectors across the economy.
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