The U.S. job market is in a historic freeze with hiring and turnover at record lows, and the Iran war threatens to exacerbate this trend, economists say.
Pre-Conflict Job Market Stagnation
- Hiring rates are the lowest since 2013, excluding the start of the Covid-19 pandemic, according to U.S. Bureau of Labor Statistics data through January 2026.
- Layoffs are occurring at historically low levels.
- Worker quits are at the lowest sustained rates in about a decade, indicating diminished confidence in job mobility.
Iran War's Chilling Effect
- The conflict, which began on Feb. 28, 2026, introduces additional uncertainty, particularly around energy prices and global economic stability.
- Stanford economist Nicholas Bloom describes the situation as a "superhero ice-blast" that has slowed both hiring and firing across the economy.
- Businesses are hesitant to hire due to fears of making costly mistakes if demand falls short of expectations.
Broader Economic Uncertainties
- Employers face ongoing uncertainty from volatile trade policies, such as the tariffs imposed by President Donald Trump in 2025.
- Energy price volatility and risks of a global recession further constrain business investment and hiring decisions.
- Economist Cory Stahle of Indeed notes that high transportation costs and unpredictable energy prices are eroding business profitability.