US Adds 151000 Jobs in February, But Unemployment Rises to 4.1%

The U.S. added 151,000 jobs in February, up from January’s revised 125,000 but below the expected 160,000. Unemployment rose to 4.1%, with 203,000 more jobless Americans. Healthcare, finance, and transportation saw job growth, while the federal government cut 10,000 jobs. Restaurants and bars continued to decline, losing 28,000 positions. Economist Sarah House predicts slower hiring and rising unemployment due to Trump’s budget cuts, workforce reductions, and tariffs. The job market has cooled from post-pandemic highs, averaging 168,000 jobs per month in 2023.

The Federal Reserve paused rate cuts as inflation progress stalled. Wage growth slowed to 0.3% in February from 0.4% in January. Revive Environmental is expanding, but biotech and tech firms are cutting high-level executives. Federal budget cuts are impacting startups dependent on grants. While the labor market remains resilient, economic uncertainties could pose future challenges.

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• US Job Growth Slows in First Full Month of Trump Presidency Amid Market Turbulence

US Adds 151000 Jobs in February, But Unemployment Rises to 4.1%

The U.S. job market showed steady growth in February, with employers adding 151,000 jobs, according to the Labor Department. This marks an increase from the revised 125,000 jobs reported in January but falls short of the projected 160,000. Despite the job gains, the unemployment rate rose slightly to 4.1%, with 203,000 more Americans becoming unemployed. Employment growth was seen in healthcare, finance, and transportation and warehousing, while the federal government cut 10,000 jobs, the highest reduction since June 2022. The full impact of President Donald Trump’s workforce reductions is expected to be more evident in the March report. The restaurant and bar industry also continued to decline, shedding nearly 28,000 jobs in February, following a similar drop in January.

Economists warn of looming uncertainty, with Wells Fargo senior economist Sarah House predicting slower hiring and higher unemployment due to Trump’s budget cuts, federal job reductions, and tariffs. She also cautioned that government spending cuts could impact the private sector, particularly contractors and nonprofits, while escalating trade tensions may further challenge the labor market. The job market has cooled significantly from its peak post-pandemic recovery, when employers added an average of 603,000 jobs per month in 2021. By 2023, this figure had declined to 168,000 per month.

In response to inflation, the Federal Reserve raised interest rates 11 times between 2022 and 2023, and although inflation eased to 2.4% by September 2024, progress has since stalled, leading the Fed to pause further rate cuts. Wage growth also showed signs of slowing, with average hourly earnings rising by 0.3% in February compared to 0.4% in January. Given the current economic conditions, the Fed is likely to remain cautious before making further adjustments to interest rates.

Business prospects remain mixed, with some companies expanding while others are reducing their workforce. Environmental technology firm Revive Environmental is planning to hire 10 to 20 additional employees in Ohio and Michigan, driven by the demand for its PFAS contamination treatment solutions. Meanwhile, Sheela Mohan-Peterson, owner of a Patrice & Associates recruiting franchise, has observed an increase in job seekers from senior executive positions in biotech and technology firms. She attributes this trend to federal budget cuts that have affected grants relied upon by startups, leading companies to reduce high-paid executive positions to manage costs.

While the labor market remains stable, ongoing economic shifts and policy changes may create further challenges in the months ahead. The impact of federal spending cuts, workforce reductions, and new tariffs could slow hiring and increase layoffs, particularly in industries reliant on government contracts and international trade. Small businesses and startups may struggle with reduced access to funding, while larger corporations could delay expansion plans due to economic uncertainty. Consumer confidence and spending patterns may also be affected, influencing overall economic growth. Additionally, if inflation remains above the Federal Reserve’s target, interest rate cuts could be postponed, further tightening financial conditions.

US Job Growth Slows in First Full Month of Trump Presidency Amid Market Turbulence

The U.S. job market grew at a slower pace than expected in February, the first full month of President Donald Trump’s administration, according to government data released on Friday. Employers added 151,000 jobs, falling short of economists’ projections of 170,000, while the unemployment rate inched up to 4.1%, though it remained historically low. Despite the lower-than-expected job gains, Wall Street responded positively, with the three major stock indexes recovering losses from the previous day. Although hiring increased compared to January, it still lagged behind last year’s monthly average.

Federal Reserve Chair Jerome Powell, speaking at the U.S. Monetary Policy Forum in New York City, reaffirmed confidence in the economy, stating that despite ongoing uncertainties, the labor market remains strong. Job growth was seen in industries such as health care, social assistance, and finance, but federal employment declined by 10,000 jobs, likely reflecting staffing cuts under the Trump administration.

The report comes amid heightened market volatility following recent tariff actions by the Trump administration. Although the president temporarily lifted some tariffs on Canadian and Mexican goods, investor concerns persisted, contributing to sharp market declines on Thursday, when the Dow Jones Industrial Average dropped about 425 points (1%), the S&P 500 fell 1.7%, and the Nasdaq tumbled 2.6%. These tariffs are part of a broader economic policy agenda that includes budget cuts and rollbacks on diversity, equity, and inclusion initiatives. Additionally, the administration has undertaken widespread federal job reductions, though their full effect may not yet be reflected in the February employment report.

Meanwhile, inflation continues to pose a challenge, with consumer prices rising 3% year-over-year in January, exceeding the Federal Reserve’s 2% target. Egg prices, a key indicator of rising costs, surged 53% due to supply shortages caused by bird flu. Economic uncertainty has also impacted consumer confidence, with a key consumer sentiment index recording its largest monthly drop since August 2021, according to the nonpartisan Conference Board. The number of consumers expecting a recession within the next year reached a nine-month high, with growing concerns about job market conditions, stock market performance, and rising interest rates.

However, not all indicators were negative, as consumer sentiment toward current business conditions improved and home-buying plans continued to recover. Mortgage rates have now declined for seven consecutive weeks, with the average 30-year fixed mortgage rate falling to 6.63%, its lowest level since December, according to Freddie Mac.