Source: US job market grows amid threats of mass federal layoffs and Trump tariffs – The Guardian

Summary:

Job Growth and Unemployment Rate

  • The U.S. economy added 151,000 jobs in February, an increase from the adjusted 125,000 jobs in January.
  • The unemployment rate remained relatively stable at 4.1%, compared to 4% in January.
  • Economists had anticipated 170,000 new jobs for February.

Sector-Specific Employment Changes

  • A loss of 10,000 federal jobs occurred, offset by gains in healthcare, financial activities, transportation and warehousing, and social assistance.
  • The data was collected in the second week of February, with further impacts from government layoffs expected to appear in future reports.

Economic Analysis and Forecasts

  • Thomas Ryan from Capital Economics noted the economy’s soft start to the year but dismissed fears of an imminent recession.
  • Private-sector hiring remains at a healthy average, though concerns may arise in March due to federal layoffs.

Additional Employment Data

  • ADP reported 77,000 new hires in February, below projections.
  • Challenger, Gray & Christmas reported 172,017 job cuts, the highest since July 2020, with over 62,000 from federal agencies.

Impact of Government Policies

  • The effects of President Trump’s policies, including federal layoffs and tariffs on China, Canada, and Mexico, are yet to fully manifest in the job market.
  • Unions are challenging the layoffs, and Trump announced a delay in tariffs on Mexico and Canada.

Consumer and Market Confidence

  • Consumer confidence experienced its largest monthly decline in nearly four years.
  • Wall Street confidence fell significantly following the announcement of 25% tariffs on Canada and Mexico.

Federal Reserve and Interest Rates

  • The Federal Reserve will meet on March 18-19 to discuss potential interest rate changes, currently at 4.25% to 4.5%.
  • Inflation remains above the Fed’s 2% target, with January’s rate at 3%.
  • Fed Chair Jerome Powell expressed uncertainty regarding future fiscal and regulatory policies.