This paper studies the relation between macroeconomic uncertainty andearnings smoothing. It investigates US commodity firms’ quarterly data in theperiod 1990-2019. The findings show that oil and iron firms use both accrualsand real operations to smooth earnings in quarters with high commodity pricevolatility. The earnings smoothing is economically significant and is aimed atconveying useful information about the firm’s true economic performance toinvestors. The findings are robust to placebo tests using the gold firms, toendogeneity tests with GMM and IV, and to analyses using the Economic PolicyUncertainty (EPU) index. This paper contributes to the literature onmacroeconomy-wide factors and firm-specific decisions and to prior earningssmoothing literature. This study informs market participants about thecommodity firms’ financial reporting quality. It has policy implications forfinancial reporting regulation in extracting industries