The unemployment rate rose slightly in April, from 4.256 percent to 4.337 percent (rounding removed), as the number of unemployed increased 134,000 to 7.37 million, according to the latest data published by the U.S. Bureau of Labor Statistics.
That is still lower than its previous high of 4.539 percent, and 7.78 million seen in November 2025, respectively.
It had marked growth from the bottom seen in April 2023 a little below 5.75 million, which is normally what happens when inflation is unwinding itself, which it has from its June 2022 peak of 9.1 percent.
The employment level in the household survey also continued falling for the fourth straight month, now down to 162.6 million, from its peak of 163.9 million in January — a 1.3 million decrease. It looks a lot like peak employment, non-farm payrolls in the establishment survey at an all-time high of 158.7 million.
So, if there is a silver lining to unemployment pressing slightly upward, it’s that it usually coincides with periods of longer-term disinflation, the current conflict in Iran notwithstanding, which have seen oil prices jump as well as gasoline prices rise from $2.77 a gallon in January to now $4.45 a gallon.
And sometimes that happens at the end of cycles, for example, in 2008 oil prices spiked massively and inflation hit its peak for the cycle at 5.3 percent in August 2008 — with unemployment following in its wake after prices began collapsing.
Similar spikes in unemployment also followed or coincided with preceding spikes in inflation in the 1973-1975 recession, the 1980 recession, the 1981-1982 recession, the 1990-1991 recession and the 2001 recession.
All but the 1981-1982 recession there included oil shocks preceding each recession, including the 2008-2009 recession.
The only other exception in recent memory appears to be the unexpected Covid recession, which occurred not because the economy had overheated but because of the pandemic-led economic lockdowns that saw unemployment increase to 23 million in a very short period of time, quickly dropping off as the economy reopened.
Historically, at the rounded 4.3 percent, unemployment is low and that’s surely good news for now, so the thing to watch will be the impacts of higher oil prices on overall inflation, and how that impact things like consumer credit in U.S. households, now growing at just 2.3 percent as of March 2026. Often in inflation spikes, Americans can spend less as their credit maxes out, only to eventually fall as the slowdown or recession takes hold.
Those slowdowns in turn can help ease prices, but sometimes oil shocks are more persistent, especially those that followed the Arab oil embargo of the 1970s and the Iranian Revolution in 1979, which saw oil prices much stickier before slowing down in the second half of the 1980s.
Ultimately, the question might be decided by how long the war goes before the Strait of Hormuz is reopened and global oil production is brought back to the levels prior to the war. In other words, the longer the inflation and oil shock continues, the more likely it might be to feed back into the U.S. economy and labor markets. Stay tuned.
Robert Romano is the Executive Director of Americans for Limited Government Foundation.
