Goldman Sachs reveals the "employment blood and tears account" behind the US-Iran war: "Devouring" 10,000 jobs per month, and the unemployment rate may rise to 4.6%.

Goldman Sachs said that the military conflict between the United States and Iran is quietly dragging down the US labor market, and the oil price impact caused by this war will lead to a monthly reduction of about 10,000 jobs in the US labor market for the remainder of the year - a impact that will be most pronounced in restaurants, hotels, and retail stores across the country. In a research report released on Thursday, Goldman Sachs economist Pierfrancesco Mei detailed how the rise in energy prices translates into pressure on the labor market - and the results are not optimistic. As explained earlier this week by Goldman Sachs commodities strategists, they expect Brent crude prices to average $105 in March, rise to $115 in April, and then gradually fall to $80 in the fourth quarter under the assumption that shipping flow through the Strait of Hormuz is severely disrupted for about six weeks. In an adverse scenario - that is, if the conflict escalates further - Brent crude prices could rise as high as $140 per barrel, and in a "severely adverse" scenario, they could even reach $160. There is no sign of an imminent resolution to the US and Israeli war with Iran, even though President Trump has signaled hopes of quickly ending the conflict. White House press secretary Levit said the conflict is expected to last four to six weeks, consistent with Goldman Sachs' predictions. Trump said that an agreement could be reached as soon as within five days. However, experts are clearly more skeptical. Analysts at the Brookings Institution warn that without a genuine regime change, Iran may rebuild its capabilities and exacerbate regional instability. And Maximilian Hess of Ementena Advisory says that this situation is a "lose-lose situation" for Washington, as the advantage Iran has in drones and pressure from the Gulf region increases the likelihood of ground warfare. Where are the jobs disappearing? The disappearance of jobs is not evenly distributed. Goldman Sachs' industry-level analysis shows that the leisure and hospitality industry is the hardest hit by the impact, with about 5,000 jobs lost per month, while the retail industry loses about 2,000 jobs per month. The logic is simple. When energy prices soar, consumers first cut down on discretionary spending - reducing vacations, dining out less, and cutting back on shopping frequency - while necessary expenses such as medical and housing will still be paid. In other words, the oil price impact will first hit the service economy of the working class, then spread to more defensive industries. This dynamic is particularly severe for Generation Z. A recent report by the Bank of America found that after consumer spending growth in recent years lagged behind other generations, by the mid-2025s, Gen Z's year-over-year consumption growth had actually exceeded that of the "Baby Boomers", mainly due to a slowdown in rent increases and a wage growth of about 9%. But with US gasoline prices up about 26% year-on-year as of March 23, Bank of America economists Joe Wadford and David Michael Tinsley warn that this recovery "could be stifled before it fully takes hold." Generation Z has a higher proportion of gasoline spending in discretionary income than any other generation - and many of them are in the leisure and hospitality industry, where Goldman Sachs expects the largest job cuts. This creates a feedback loop of dual impact: rising fuel costs, and reduced working hours. Shale oil weakens the impact, but does not eliminate it Goldman Sachs cautiously points out that compared to the 1970s, the US economy is much more resilient to oil price shocks. The bank estimates that the impact of a 10% increase in oil prices on unemployment and job growth is only about a third of what it was between 1975 and 1999. Two structural factors contributing to this change include: the decrease in US GDP's reliance on oil, which mitigates the drag on consumer and business investment; and the surge in domestic shale oil production since 2010, which provides a hedge against energy industry employment and capital expenditure. However, this hedge is thinning. The significant increase in oil extraction productivity means that even as production increases due to rising oil prices, the energy industry is unlikely to add a significant number of jobs. Goldman Sachs expects energy industry capital expenditure to not experience significant growth, which means that supporting industries such as pipeline construction, oil machinery manufacturing, and oil transportation will also have a hard time getting a significant boost this time. Unemployment rate could rise to 4.6% The cumulative effects are reflected in Goldman Sachs' macroeconomic forecasts, which the bank also adjusted earlier this week. Goldman Sachs expects the US unemployment rate to rise by 0.2 percentage points to 4.6% by the third quarter of 2026. About half of this increase comes from the oil price shock, while the other half reflects slower pre-conflict growth that could not keep up with labor supply employment growth. Goldman Sachs notes that its unemployment rate forecast is highly consistent with simulations run by the Federal Reserve's FRB/US model, providing additional credibility to the forecast. However, in a severely adverse oil price scenario, the unemployment rate could rise an additional 0.3 percentage points - significantly pushing up the unemployment level, and possibly forcing the Federal Reserve to make adjustments to its interest rate policy. These research findings come from the US economic team led by Jan Hatziu, chief economist at Goldman Sachs. Currently, Wall Street is increasingly scenario-playing the macroeconomic consequences of the Middle East conflict - this crisis has already prompted Goldman Sachs to lower its GDP growth forecast and raise its inflation expectations. For young Americans who only recently saw signs of financial relief, the economic cost of this war may be particularly harsh. The estimated loss of 10,000 jobs per month is a net indicator that takes into account the limited job increase that the energy industry may bring. The conclusion is clear: for American workers, the Middle East war is generating real and sustained economic costs - and this bill is being paid every month.