Jobless Claims Rise as Oxford Economics Says Iran War Has Made Labor Market 'Vulnerable'

10:23 AM EDT, 03/26/2026 (MT Newswires) -- Weekly applications for unemployment insurance increased as Oxford Economics cautioned that the Middle East conflict has made the labor market "vulnerable."

For the week through March 21, the adjusted number of jobless claims rose by 5,000 to 210,000, in line with the Bloomberg-polled consensus, the Department of Labor said Thursday. The previous week's level was left unrevised.

The four-week moving average totaled 210,500, decreasing by 250 from the prior week's unrevised average. Unadjusted claims fell by 5,002 to 185,980 on a weekly basis, according to the data.

"While labor market conditions have stabilized and layoffs remain low, the US/Israel war with Iran has made the labor market more vulnerable," Oxford Economics Lead US Economist Nancy Vanden Houten said in remarks emailed to MT Newswires.

The war started at the end of February, and has since spread across the Middle East, stoking uncertainty around the inflation and growth outlook.

Earlier this month, government data showed that US employment unexpectedly fell in February and the jobless rate ticked higher to 4.4%.

"We think downside risks to the labor market leave the (Federal Reserve) on track to lower rates twice this year with the first cut coming in June," according to Vanden Houten.

Last week, the Fed kept its monetary policy steady amid uncertainty around the Iran war, and maintained its interest rate guidance despite upgrading inflation estimates. Markets widely expect the central bank to maintain its current benchmark lending rate at its next meeting in April, according to the CME FedWatch tool.

Seasonally adjusted continuing claims for the week ended March 14 amounted to about 1.82 million, its lowest level since May 25, 2024, trailing Wall Street's views that pointed to 1.85 million. Continuing claims dropped by 32,000 from the previous week's level, which was revised down by 6,000. The four-week moving average declined by 2,000 to 1.85 million, its lowest point since Oct. 5, 2024, according to the DOL.

Continued claims, which track initial claims over time, are trending lower, indicating "that while the pace of hiring remains weak, it hasn't deteriorated," Vanden Houten said.

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