The grim jobs report comes at a tough time for the White House. Gasoline prices are rising due to the Iran war, while turmoil in the stock market has savers and retirees worried about the status of their 401(k)s.
Data released Friday showing 92,000 job losses in February will put pressure on the Trump administration to reconsider military and homeland security policies that are complicating the country’s economic outlook. But there may not be enough time to force major policy shifts that could improve the economic outlook before November’s midterm elections.
The economic situation is mixed. The unemployment rate rose to 4.4% in February, marking a decline from the previous month. That percentage is still historically low. Meanwhile, wages rose 3.8% year-on-year, helping workers recover from the loss of purchasing power caused by high inflation under the Biden administration.
What makes the report rosy is that it shows that the economy is broadly stagnant, but that there are good prospects for improvement. Healthy companies don’t need to expand now because they’re more productive and aren’t doing mass layoffs. Also, with the crackdown on illegal immigration in full swing, it is no wonder that a significant number of people are leaving their jobs.
“Even if you have a huge increase in productivity, you’re going to have a lot more output, but you’re not going to have a lot more jobs,” White House chief economic adviser Kevin Hassett told CNBC’s “Squawk Box” on Friday.
But that big-picture message may not go over well with people who have seen gas prices soar by nearly 23 cents in just one week, according to AAA. Captains of ships carrying oil and other energy supplies are reluctant to transit the Strait of Hormuz while missiles are in flight. As of Friday morning, the price of Brent crude oil was above $90 per barrel. It was around $72.50 a week ago, before the Iran operation began. The last time oil prices exceeded $100 per barrel was in 2022, after Russia invaded Ukraine.
Stocks fell as investors accepted that rising energy prices could push up inflation. As of Friday morning trading open, the S&P 500 was down 1.5%. That could prompt the Federal Reserve, led by Chairman Jerome Powell, to reconsider lowering interest rates, as President Donald Trump has repeatedly called for.
“It’s time for the Federal Reserve to cut interest rates and stop foolishly strangling the resurgence of the American economy under President Trump,” White House Press Secretary Khush Desai told CNBC on Friday.
National Economic Council Secretary Kevin Hassett speaks to reporters in front of the White House in Washington, DC, USA on February 25, 2026.
Evelyn HochsteinReuter
So far, the government has not expressed any major concerns. Hassett told CNBC that releasing oil from the Strategic Petroleum Reserve is “not being discussed.”
President Trump said in a social media post Friday that he is not considering any quick deal with Iran to end the fighting. “There is no deal with Iran other than unconditional surrender!” he wrote.
However, economic indicators such as employment statistics will make it difficult to maintain that position. Americans may wonder why the United States is paying economic and military costs to Iran, since President Trump said the June airstrike destroyed the country’s nuclear program. A new joint operation between the United States and Israel has killed Iran’s longtime supreme leader. Why continue?
For now, it may not be up to the United States. With Iran still between leaders, it is not clear who could strike a cease-fire agreement, even if one were possible. And the Iranian military has little left to lose in attacking U.S. interests, including energy supplies. The threat of a full-scale American attack was one of the reasons Iranians refrained from retaliating against the United States in previous episodes. That bridge has now been thoroughly burned.
It may be easier for Mr. Trump to focus on immigration. The crackdown in Minneapolis created enough political damage for President Trump to soften his approach. Now he has such opportunities across the country. On Thursday, he fired Homeland Security Secretary Kristi Noem and nominated Sen. Markwayne Mullin (R-Okla.) to replace her. An immigration approach that focuses on arresting dangerous criminals and avoiding attacks on businesses may help drain the labor market of workers.
Trump’s desire for low interest rates is within reach. Federal Reserve chairman candidate Kevin Warsh is likely to cut rates regardless of the oil crisis, largely because he also believes in the productivity story. But in order for Warsh to become president, Trump will need to close the investigation into Powell. The investigation has hindered Republican Sen. Thom Tillis’ bid to become a Fed nominee. President Trump and District of Columbia U.S. Attorney Jeanine Pirro have shown no signs of slowing down so far.
Some progress could be made if the Trump administration pushes to improve the overall economic outlook, but no one knows how long it will take to see that in the numbers. But that will require a level of political coordination and strategic discipline that Mr. Trump struggled with during his second term. The pace of events only makes it more difficult.
