War in the Middle East, oil, and jobs

No end in sight for the economic consequences of the war. From Marketplace, I'm Subri Ben-Ashor in New York. The U.S. is threatening a blockade of Iranian ports and to stop any ship that has paid a toll to Iran, which was the main method of getting through the strait up till now. This blockade would start minutes from now at 10 a.m. Eastern. Iran has said it would respond if that blockade happens, threatening ports in Gulf states and the flow of oil. Oil prices are up about 7%. Julia Coronado is president of Macroposly Perspectives and a professor at UT Austin. The critical issue is that, yes, now it's a broader blockade, and that means the oil supply is even more restricted than it was before. So not only is the Strait of Hormuz closed, but Iran has no other, if it's effective, no other option to get oil out, so even less oil for the global market. Meanwhile, Iran has threatened that no port in the Persian Gulf is safe if its ports aren't, and it could use its proxies in Yemen to close the Bab El-Mendab strait over on the other side of the Gulf, which is Saudi Arabia's alternate route for exporting some oil. None of this looks good for oil prices. It does not. The longer it goes on, the more production is damaged and shut down because there's no place to store the oil, and that's not a simple task. So shutting down and reopening, drilling operations is an extensive effort that takes time and weeks and many resources. So even if all of this were to end tomorrow, we're already looking at a pretty extended disruption, even in the best case scenario. And we are certainly not in the best case scenario. Julia Coronado, founder and president of Macro Policy Perspectives. Thank you as always. My pleasure. Goldman Sachs just announced net earnings of more than $5 billion for the first quarter this year. It is the first in a parade of banks releasing results this week. Investors are paying close attention because the status of banks can tell us a lot about the health of the overall economy. Marketplaces Nancy Marshall-Genzer has more on that. Banks are expected to report strong earnings growth this week, but investors have their eye on what's next. Analysts on the bank's earnings calls are likely to ask about how the war in the Middle East is affecting banks and their clients. For example, are mergers being delayed because of all the uncertainty? And there will likely be questions about private credit. Banks lend money to private credit funds who then make loans to private businesses. Consumers are also wondering about AI tools that can exploit flaws in bank software. And bank earnings can tell us if consumers are borrowing more or spending less because of higher energy prices. JPMorgan Chase, Wells Fargo, and Bank of America are also scheduled to report profits this week. I'm Nancy Marshall-Genzer for Marketplace. Ready to launch your business? Get started with the commerce platform made for entrepreneurs. Shopify is specially designed to help you start, run, and grow your business with easy customizable themes that let you build your brand. Marketing tools that get your products out there. Integrated shipping solutions that actually save you time. From startups to scale-ups, online, in-person, and on the go. Shopify is made for entrepreneurs like you. Sign up for your $1 a month trial at Shopify.com slash setup. The economy giveth and the economy taketh away. About a week ago, we got the March jobs report and it was actually pretty good. 178,000 new jobs, unemployment rate came down. But then Friday, we got the inflation numbers for March and those were terrible. Inflation spiked prices up 3.3% from a year ago. So what does that mean for jobs? The war is impacting sectors of the economy differently. The sharp rise in oil and gas prices has been a boon for the energy sector. The U.S. now pumps enough of the stuff to export a lot. And with prices so high, there's an incentive to increase production, says Tom Closa, chief energy advisor at Gulf Oil. I think we'll see the labor force ramp up a little bit. When you're drilling for shale oil in the Permian Basin, it's very labor intensive. The workforce has actually been declining for more than a decade. But Closa says there's more promise now with projects ready to go in the Permian Basin and Gulf of Mexico. They have breakeven numbers for these projects, probably a third of what the price accrued is these days. So they can't wait to ramp those up. Defense industries also stand to benefit. Trump's fiscal year 2027 budget, if it passes, includes a more than 40% increase in defense spending. Jerry McGinn at the Center for Strategic and International Studies expects increased hiring by defense contractors, which already employ hundreds of thousands of workers. A lot of the funding is buying existing munitions, new munitions, new capabilities as well. So there's a lot of industrial based impact with this potential increase in spending. Overall though, the impacts of the war are mostly negative for economic growth and employment. Michael Gritten is seeing this in Louisville, where he runs the Regional Workforce Development Agency, Kentucky Anna Works. UPS is clearly being affected by the increase in fuel costs. We have lots of trucking, logistics and barge traffic and all that kind of stuff. All of those things are being affected negatively. Freezing out any near term job growth. Now keep in mind, through mid-March, we saw a strong rebound in job growth, according to the BLS. But says Boston College economist Brian Bethune will see. A different picture in April. Businesses will throttle back on their hiring. Bethune points out that with the surge in prices in March, inflation is now cancelling out all the wage gains workers are getting. Wallets are being squeezed. That I think will lead to containment of spending and I think businesses will go back to how they were successful in 2025. Hunkering down, maybe not laying workers off, but not hiring either. I'm Mitchell Hartman for Marketplace. And in New York, I'm Sabri Beneshore with the Marketplace Morning Report. From 8 p.m. American Public Media. History is one of the greatest tools we have. It offers a way to better understand our own lives and the lives of others. I'm Maggie Smith, poet and host of The Slowdown. Every weekday, I share one poem and a few minutes of reflection. Five minutes to breathe, to notice, to begin again. It's an easy ritual you can take anywhere. Your kitchen, your neighborhood, or your morning commute. 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