The Trump administration’s federal cuts and economic uncertainty contributed to a recession-level spike in layoffs last month. US employers announced plans to cut 172,017 jobs, a 103% increase from January and the highest February total since 2009, according to Challenger, Gray & Christmas. This marks the 12th highest monthly total in 32 years, with 11 others occurring during recessions.
The government sector saw the largest share of job cuts due to the Department of Government Efficiency’s actions, including slashing federal spending and canceling contracts. There were 62,242 announced cuts across 17 federal agencies, a significant increase from February 2024. The impact extended to private nonprofits, leading to another 894 cuts.
Outside the government, significant cuts occurred in retail (38,956), technology (14,554), and consumer products (10,625). Reasons for cuts included DOGE actions (63,583), bankruptcy (35,172), market/economic conditions (28,098), and restructuring (16,828).
Despite these cuts, hiring plans surged in February to 34,580, the highest for this month since 2022. Economists are closely monitoring unemployment claims to gauge labor market health. ADP’s employment report showed a slump in private-sector hiring, with an estimated 77,000 jobs added, significantly lower than expected.
Consumer spending fell in January for the first time in nearly two years, but economists caution against drawing conclusions from one month. The upcoming BLS jobs report is expected to show solid job gains, with a projected net gain of 160,000 jobs and unemployment staying at 4%.
Federal cuts are unlikely to significantly impact February’s jobs report due to timing, but may be more visible in March and April reports. Economists note that while the labor market has slowed, it has not collapsed, maintaining consumer spending and aiming for a soft landing.
— news from CNN