A jobs report to be released on Friday will provide a key gauge of the U.S. economy as a sharp rise in fuel prices hammered shoppers weeks into the war with Iran.

The fresh data, which details employment in April, is set to arrive as the war continues to drive up gasoline prices and borrowing costs, threatening a drag on the economy.

Economists expect the U.S. economy to have added 55,000 jobs last month. The anticipated figure would mark a sharp slowdown from 178,000 job gains in March. The U.S. Bureau of Labor Statistics (BLS) collected that survey data through the second week of March, before the full effects of the oil shock set off by the war.

The unemployment rate clocked in at 4.3% in March, which amounts to a low unemployment rate by historical standards.

The U.S. added an average of about 15,000 jobs per month in 2025, BLS data showed. That performance indicated a cooldown from 186,000 jobs added each month in 2024.

The Middle East conflict, which began on Feb. 28, prompted Iran’s effective closure of the Strait of Hormuz, a critical waterway that facilitates the transport of about one-fifth of the worldwide supply of oil.

The U.S. is a net exporter of petroleum, meaning the country produces more oil than it consumes. But since oil prices are set on a global market, U.S. prices move in response to swings in worldwide supply and demand.

The price of an average gallon of gas stands at $4.55 as of Thursday, marking an increase of $1.57 per gallon since the war started, AAA data showed. That amounts to a 52% jump in about two-and-a-half months.

In theory, a prolonged oil shortage could drive up prices for a vast array of goods, sapping energy from consumer spending, which powers most of the nation’s economic growth.

A potential jump in costs for additional goods delivered through the Strait of Hormuz — such as fertilizer and diesel fuel — could also raise prices beyond gasoline, putting pressure on the Federal Reserve to hike interest rates in an effort to quell inflation.

Last month, Fed Chair Jerome Powell described the economic outlook as “highly uncertain.”

“We’re kind of waiting to see what happens with events in the Middle East,” Powell said.

The Fed has opted to hold interest rates steady at three consecutive meetings since the outset of 2026. Before that, the Fed cut interest rates a quarter-point three straight times.

The benchmark interest rate stands at a level between 3.5% and 3.75%. That figure marks a significant drop from a recent peak attained in 2023, but borrowing costs remain well above a 0% rate established at the outset of the COVID-19 pandemic.

If the Fed moved to raise interest rates, it would hike borrowing costs for many consumer and business loans, risking a slowdown in hiring.

Markets peg a roughly 70% chance of interest rates holding steady for the remainder of this year, according to the CME FedWatch Tool.