President Trump’s odds of facing a midterm election revolt over the economy may hinge on whether a vulnerable U. S. job market can withstand the conflict in Iran.
The April jobs report, released Friday, defied expectations with a gain of 115,000 new workers and a stable unemployment rate at 4.3 percent.
After more than a year of steep cuts to immigration and ever-changing import taxes, the U. S. labor market may finally be adjusting to an economy with far fewer workers and more uncertainty than before Trump took office.
“An uneasy status quo best described as a low-hire, low-fire labor market remains intact,” Joe Brusuelas, chief economist at audit and tax firm RSM, said of the April jobs report.
The decline in job seekers “is more than sufficient to keep the unemployment rate from rising,” he explained.
Job growth has fallen sharply since the start of Trump’s first term, but the unemployment rate has only ticked up slightly from 4 percent in January 2025.
While the economy is adding far fewer jobs, the administration’s immigration and deportation policies have reduced the size of the U. S. workforce by roughly 600,000 people.
A stronger job market could be a political boost for Trump and Republican lawmakers, who are under immense pressure from voters to deliver the lower prices the president promised during his 2024 presidential campaign.
Whether that balance in the labor market will remain, however, depends largely on the war in Iran.
Sharply rising gasoline and energy prices are forcing Americans to shift their spending away from other sectors of the economy. While consumer spending on the whole has remained high, economists say it may only be a matter of time before the costs of the conflict become too much to bear for households and businesses.
“The real weakness underneath is that our labor market is in no position to absorb workers right now, and it’s not absorbing workers right now. It just doesn’t have that many to not absorb,” said Kathryn Anne Edwards, an economist and co-founder of Optimist Economy, an education nonprofit.
“Were that to change, this would look like a bad recession.”
Trump and top administration officials have simultaneously expressed confidence in the state of the economy while scrambling to find ways to bring down costs.
In a Sunday social media post, Trump bashed economists who projected lower job growth in April and Federal Reserve Chair Jerome Powell, whom the president has blamed for holding back the economy by refusing to zero out interest rates.
“Despite the best efforts of Jerome ‘Too Late and Won’t Leave’ Powell, and the America Hating Democrat Party, more Americans are working today than ever before,” Trump wrote. “Happy Mother’s Day and, know that, we are MAKING AMERICA WEALTHY AND SAFE AGAIN!”
A day later, Trump suggested lifting the federal tax on gas until oil markets stabilize and eased import restrictions on foreign beef, a move meant to reduce the rising costs of the key food staple.
A serious increase in joblessness could be an insurmountable political obstacle for Trump and Republicans in the midterm elections. The president is already weathering dismal overall job approval ratings, particularly as they relate to his handling of the economy, according to recent polling.
Just 38 percent of registered voters approve of Trump’s economic stewardship, according to an Economist/YouGov poll conducted between May 1 and 4. Only 28 percent of survey respondents approved of his handling of inflation, and a whopping 69 percent said they disapproved of the president’s actions on rising prices, according to the poll.
Trump’s economic approval ratings dove as gas prices rose because of the war in Iran, which has choked off oil and fertilizer exports through the Strait of Hormuz.
The average price of a gallon of regular gas was up to $4.52 on Monday from $3.14 one year ago, according to AAA. Prices overall rose 0.9 percent in April, according to the Labor Department’s consumer price index, pushing the annual inflation rate last month up to 3.3 percent, the highest rate since April 2024.
The solid April jobs report did not likely reflect the rising costs driven by the Iran war, said Guy Berger, chief economist at Homebase, who called the latest labor market data “a signal of what could have been.”
“If we didn’t have all this other stuff going on, then I would tell you, I feel really good about the rest of the year,” he continued. “I think there are things looming that make me feel — I’m not panicked, but more worried.”
Despite signs of a potential breakthrough last week, Trump warned Monday that the U. S. ceasefire with Iran is “on massive life support,” which sent stocks falling and oil prices rising again.
Midterm elections are already historically daunting for the incumbent president’s party, which often loses control of at least one chamber of Congress given the pendular nature of U. S. politics.
The rising economic backlash against Trump and Republicans could make it even harder for them to retain control of the House, which they regained in 2022 amid anger over inflation under former President Biden.
Democrats would need to win eight of 18 House districts to capture the gavel, according to the nonpartisan Cook Political Report, assuming they do not lose any of the seats seen as solid, likely or leaning in their favor. They face a more challenging path to taking the Senate, where Democrats would need to win at least one seat leaning toward the GOP and all toss-ups without losing a seat they are expected to win.
The Supreme Court’s recent weakening of the Voting Rights Act has set off a redistricting scramble that may help the GOP mitigate its midterm losses. Even so, the deepening economic costs of the Iran war could still pose political obstacles.
Edwards said that even before the Iran war started, the U. S. economy was already starting to show the earliest signs of a downturn: a slowdown and then stagnation in hiring, driven largely by tariff-related headwinds.
The next step, she warned, is often layoffs.
“The survey of the manufacturers and various business leaders will say that they are all just treading water trying to get through this policy uncertainty over the past year and a half,” Edwards said.
The war, she explained, could be “a bridge too far for people who hire, and people who fire and people who decide to stay in business.”
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