On February 10, 2026, job seekers interacted with recruiters at a job fair held by the North Seattle Employment Resource Center in Seattle, USA. Last year, U.S. job growth was weak, but even without a rebound, signs of stabilization had begun to emerge. Now, a conflict thousands of miles away has not only interrupted this potential recovery but may also push the labor market further off track. Four weeks have passed since the U.S. and Israel launched strikes against Iran. This escalating, deadly conflict in the Middle East quickly triggered economic ripple effects: the blockage of key shipping routes caused oil prices to surge, supply chains to snarl, and gasoline costs to rise. Fears of heightened inflation and increased uncertainty have emerged, creating conditions that suppress job market growth. "If the Strait of Hormuz remains closed and oil prices stay above $100 per barrel throughout April, the situation will change completely," said Chief Economist Heather Long. "The economic picture would look very different, and a new wave of layoffs could reemerge." This sluggish, weak labor market dynamic, characterized by limited hiring and limited firing, is expected to persist in the near term. Gregory Daco, Chief Economist at EY-Parthenon, told CNN last week, "Uncertainty is delaying hiring plans, not canceling them." Daco now forecasts a "jobless growth" expansion for the U.S. economy, with approximately 20,000 jobs added per month in the first half of the year. He expects the unemployment rate, currently at 4.4%, to gradually rise to 4.7% by year's end. "The probability of a recession is around 40%. The risk is that prolonged hiring stagnation eventually morphs into more pronounced market weakness," he wrote. "Right now, the job market is cooling, not collapsing. But if uncertainty escalates again, signs of a breakdown could appear by late spring." "Stable but Stalled" Even excluding recession years, last year was one of the worst for the U.S. labor market in decades. The latest official data shows the U.S. economy added only 116,000 jobs in 2025. For comparison, the average monthly job gain in 2024 was about 121,000, a pace consistent with historical averages. However, markets had been optimistic that job growth this year would not be so dismal. Expectations were that inflation would moderate, the effects of three interest rate cuts from late 2025 would gradually filter through the economy, and new tax laws were anticipated to boost consumer spending and business investment. Furthermore, the biggest source of uncertainty was expected to fade as businesses gained clarity on the economic path, borrowing costs, tariffs and other federal policies, technological changes, and the geopolitical landscape. Instead, the new conflict in the Middle East has amplified uncertainty. "Our data does not yet show significant improvement or a sharp deterioration in the U.S. job market; overall, it remains stable but stalled," said Laura Ulrich, Head of Economic Research at the Indeed Hiring Lab, in an interview. U.S. Consumers, the Economy's Core Engine, Face Rising Costs Since the conflict began, oil prices have climbed sharply, rising by approximately $30 per barrel, with intraday spikes reaching $50. Economists note that every $10 increase in oil prices has a significant economic impact, ranging from dragging on GDP growth to pushing inflation higher. U.S. consumers felt the impact immediately. Data from the American Automobile Association shows the national average gasoline price has risen by $1 since before the conflict, reaching $3.98 per gallon. Rising energy costs could reduce the average U.S. household's annual income by over $1,350. The effects of these cost increases extend far beyond the pump. The OECD predicted that U.S. inflation could rise to 4.2% this year. Economists are closely watching the resilience of the U.S. consumer. Beyond higher prices at the pump, increased oil prices raise costs for goods and services throughout the economy. Consumer spending accounts for two-thirds of U.S. economic activity. If consumer spending falters, the U.S. job market will face significant trouble. Long noted that credit and debit card spending data from Navy Federal Credit Union shows more money flowing to energy and gasoline. However, consumers also appear to be making purchases earlier, similar to behavior seen last year ahead of anticipated high tariff impositions. "People expect airfare to become more expensive and summer vacation plans to cost more, so they are booking now," she said. She pointed out that average tax refund amounts are about 10% higher this year compared to last, providing some additional financial cushion for consumers. Sustained consumer spending can temporarily prevent business layoffs, but this dynamic cannot last indefinitely. "For now, however, consumers are still hanging on," she added. A series of key labor market data is scheduled for release this week, including job turnover figures, private-sector hiring, layoff announcements, and the crucial monthly employment report.