Trump faces economic squeeze as Iran conflict escalates

President Trump is facing an economic squeeze as the Iran war drives up oil prices and the U.S. job market sputters.

Friday brought a double dose of bad economic news for Trump: an unexpected loss of jobs in February and another surge in oil prices driven by growing conflict in the Middle East.

Trump and Republicans were already dealing with poor public approval over their handling of the economy before the president’s decision to join Israel in war against Iran.

With the war now a week old, the potential costs for the U.S. economy — and the GOP’s midterm election hopes — are quickly growing.

Higher oil prices will raise costs throughout the economy, stoking inflation and forcing Americans to pay more at the gas pump. And while the sharp drop in job growth could have moved the Federal Reserve closer to Trump’s desired rate cuts, the inflationary impact of military action against Iran could sway officials against stimulating the economy.

“The Fed is soon to meet to determine what to do with rates at a time when oil prices and gasoline prices are up and thus, inflation is probably on its way up,” wrote Eugenio Aleman, chief economist at Raymond James, in an analysis. 

“This is probably the worst scenario for monetary policy, and we will probably hear the term ‘stagflation’ repeated once again together with an ‘Iranian crisis.’”

Trump entered 2026 eager to turn the page on the economy after the U.S. suffered its worst non-recession year of job growth since 2003 and saw little improvement in inflation.

Just 40 percent of Americans approve of Trump’s handling of the economy, according to a Real Clear Politics composite of polls conducted between Jan. 29 and March 2, with 56.7 percent disapproving of the president’s economic stewardship.

Those numbers are unlikely to improve in the wake of the February employment report, which showed the U.S. losing 90,000 jobs last month and the jobless rate ticking higher.

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© The Hill