The Iran war is driving up gas prices and squeezing small US businesses, which is bad news for jobs and the wider economy.

• Small business profits dropped 1.3% in April, the sharpest fall in two years.
• Gas spending by small businesses jumped 31% from a year ago after the Iran conflict disrupted shipping through the Strait of Hormuz.
• Small businesses created half of all new US jobs in the past five years, so the pain spreads quickly.
• Small business optimism is below its 52-year average on worries about labor, inflation, and the economy.
• The war is unlikely to end soon because Israel wants to keep fighting and the US is running low on missile interceptors.

Outlook: Gas prices and business costs will likely stay high as long as the Iran conflict drags on.