The U.S. labor market entered the Iran war era already limping. The Bureau of Labor Statistics' Job Openings and Labor Turnover Survey for February 2026, released March 31, showed that the American hiring rate dropped to 3.1% — the lowest since April 2020, the month COVID-19 shut down the economy. The raw number: 4.85 million gross hires, the fewest since that same pandemic nadir. These numbers predate the conflict that has since pushed gasoline above $4 per gallon nationally and driven consumer sentiment to its worst reading in years.
What the JOLTS Data Actually Says
The Bureau of Labor Statistics reported that job openings fell to 6.9 million in February 2026, down from 7.2 million in January. That is the lowest reading in nearly two years. Layoffs rose modestly over the same period. Quits — the so-called "take-this-job-and-shove-it" indicator, which economists treat as a proxy for worker confidence — fell to 2.97 million, the fewest since August 2020. Workers, in other words, are hunkering down rather than job-hopping.
The hiring rate of 3.1% matches the lowest outside the pandemic going back to 2011, according to CNN Business's analysis of the BLS data. There are now 7.4 million unemployed people competing for 6.9 million available positions — a reversal from the post-pandemic years when vacancies outnumbered workers looking for them, according to AP News.
A Labor Market Under Pressure Before the War Even Started
The February figures capture a job market that had already deteriorated significantly before the first U.S. strike on Iran. Employers added fewer than 10,000 net jobs per month on average throughout 2025 — the weakest hiring outside a recession since 2002, according to AP News. January 2026 rebounded to 126,000 new jobs, but February saw the United States lose 92,000 jobs outright.
The causes are multiple and overlapping. High interest rates throughout 2024 and 2025 restrained business investment. Uncertainty over tariff policy under President Trump created hesitation. And, according to economists cited by AP News, a growing fear that artificial intelligence is absorbing entry-level work has made companies reluctant to commit to new hires. "Companies have grown more cautious," wrote Christopher S. Rupkey, chief economist at fwdbonds, in a commentary published after the JOLTS release. Rupkey described the drop in openings "as the Iran war started" as "not a good omen for the health and vitality of the labor market."
The War Makes Everything Harder to Read
The February JOLTS snapshot is now, in effect, the pre-war baseline. The Iran conflict began in late February 2026 and by late March had driven the national average gas price above $4 per gallon — a more-than-$1-per-gallon increase since the war's outset, according to fwdbonds. Higher fuel costs function as a de facto tax on consumers and businesses alike, reducing discretionary spending and squeezing logistics costs.
Consumer confidence, which had already softened in early 2026 amid tariff anxiety, deteriorated sharply after the war began. The AP-NORC Center for Public Affairs Research found that only 31% of Americans approved of President Trump's handling of the economy as of late March — a figure that tracks closely with consumer willingness to spend and employers' appetite to hire.
The practical result is what economists call a "low-hire, low-fire" market: companies unwilling to add staff but also reluctant to shed workers they've spent years training. The unemployment rate has remained relatively low — at 4.4% as of the most recent BLS reading — but that number obscures the paralysis. As AP News noted, there is simply very little movement in either direction.
Friday's March Jobs Report: The First War-Era Test
The Labor Department is scheduled to release the March 2026 nonfarm payrolls report on Friday, April 3. Economists surveyed by AP News expected hiring to rebound to roughly 60,000 new jobs in March — a modest positive but still far below the pace needed to absorb new labor-force entrants. If the number disappoints, it will confirm what the JOLTS data already suggested: that the labor market entered the war in poor shape and has had little time to adjust.
Wall Street is watching closely. Oil prices surged more than 4% in Asian markets overnight after President Trump said in a prime-time address Wednesday night that U.S. forces would "hit them extremely hard over the next two to three weeks," according to AP News. That price signal, layered on top of an already-fragile hiring environment, increases the probability that March payrolls fall short of estimates.
The AI Wild Card
Separate from the war, structural forces continue to suppress hiring. Al Jazeera's reporting on the February JOLTS data highlighted the growing consensus among labor economists that AI adoption is displacing entry-level and administrative roles faster than new jobs are being created to replace them. According to AP News, "there are growing worries that AI is taking over entry-level work and that companies are reluctant to make hiring decisions until they better understand how they are going to use AI."
The Indeed Hiring Lab reported in March 2026 that jobs held by men have been "the primary driver of monthly employment declines" in late 2025 and early 2026 — a trend that analysts at the lab attributed in part to automation hitting male-dominated sectors like manufacturing, logistics, and construction harder than female-dominated ones like healthcare and education.
The Bottom Line
The February JOLTS report draws a clear picture: the U.S. job market entered 2026 in the weakest hiring condition since the pandemic, with workers afraid to quit and employers afraid to hire. The Iran conflict arrived on top of that fragility — not as the cause, but as an accelerant. Gasoline prices, consumer sentiment, and business confidence have all moved in the wrong direction since. Friday's jobs report will be the first hard data point from inside the war period.
For tens of millions of Americans who were already anxious about job security before a single missile was fired, the next few monthly reports may determine whether a fragile labor market holds — or cracks.