Don’t Blame the Iran War for the Awful Jobs Report

By Noah Rothman

Friday, August 07, 2026

 

“US employers unexpectedly cut 23,000 jobs amid strain from the Iran war,” said one headline that exemplified what seems to be the consensus in newsrooms from coast to coast. The article itself, however, failed to mention Iran even once. And that’s appropriate, because there is little to connect the conflict with Iran and the July jobs report save the political media’s desire to draw a connection between the two.

 

A visualization of the job-growth data via the Washington Post’s Heather Long tells the tale:

 

 

Ironically, the first two months of the war with Iran were some of the strongest job-growth periods in Donald Trump’s second term. But otherwise, the majority of this presidency has been defined by anemic job growth. And it all began around the spring of 2025, coinciding with the start of the president’s trade war with just about every nation on earth.

 

Trump can’t say he wasn’t warned. While there is some “uncertainty” around its conclusions, the Kansas City Fed warned at the end of last year that “tariffs may have weighed on employment.”

 

The report’s authors are quick to note that the employment landscape is complex, and disruptive technologies like artificial intelligence may be having an impact. Yet “the relationship between relative job growth and the import share” is hard to ignore.

 

As for AI, while the technology may have put downward pressure on some sector-specific industries, particularly for newer entrants into the labor market, the data is inconclusive. Moreover, as the Bureau of Labor Statistics noted, the AI boom is to thank for a significant portion of the jobs that were created last month.

 

Via NBC News:

 

The agency’s data also showed a 5,000 payroll gain in the manufacturing sector in July and an additional 22,000 roles in construction. These bright spots come as the AI data center boom has benefited some industries, but deeply divided many communities where the centers are located.

 

It would be a stretch to contend that sluggish hiring in America last month is attributable to the spike in fuel prices that accompanied Iran’s efforts to close the Strait of Hormuz. Perhaps that’s why media outlets that apparently want you to blame the Iran war for America’s hiring woes don’t even bother to make the case.