New Delhi, May 1 -- In the heartland of Iran's famed carpet-making industry, manufacturing has ground to a near halt. Dairies struggle to find packages for milk and butter. Giant steel mills that once drove Iran's economy have gone silent. Hundreds of thousands have lost jobs, and millions more are at risk.

Over more than five weeks of bombardment, U.S. and Israeli strikes hit thousands of factories. The damage is reverberating across Iran's economy, threatening increasing waves of layoffs, even as Iranians face skyrocketing prices. The cost of chicken is up 75% the past month, and beef and lamb jumped 68%. Many dairy products have increased by half.

It could get worse as the United States blockades Iranian ports, choking off many impor...