WASHINGTON (AP) — U.S. employers added a solid 151,000 jobs last month, but the outlook remains uncertain as President Donald Trump threatens a trade war, purges the federal workforce, and promises to deport millions of immigrants. The Labor Department reported Friday that hiring increased from a revised 125,000 in January. Economists had anticipated 160,000 new jobs last month. The unemployment rate edged up slightly to 4.1% as the number of jobless Americans rose by 203,000.
Employment grew in healthcare, finance, and transportation and warehousing. The federal government cut 10,000 jobs, the largest reduction since June 2022, though economists do not expect Trump’s federal layoffs to significantly impact until the March jobs report. Restaurants and bars slashed nearly 28,000 jobs last month, adding to a loss of almost 30,000 in January.
“The labor market continues to hold up, but we’re still a far cry from where we were a year or two years ago,” said Sarah House, senior economist at Wells Fargo. House predicts hiring will slow and unemployment will rise as Trump continues to cut spending on programs and reduce the federal workforce while imposing tariffs on trading partners.
The economy’s strong recovery from the 2020 pandemic recession triggered an inflationary surge, peaking in June 2022 when prices were 9.1% higher than the previous year. In response, the Federal Reserve raised its benchmark interest rate 11 times in 2022 and 2023, reaching the highest level in over two decades. Despite higher borrowing costs, the economy remained resilient due to strong consumer spending, productivity gains, and an influx of immigrants easing labor shortages.
The American job market has shown resilience but has cooled compared to the rapid hiring of 2021-2023. Employers added an average of 168,000 jobs per month last year, down from 216,000 in 2023, 380,000 in 2022, and a record 603,000 in 2021. Inflation decreased to 2.4% in September, allowing the Fed to cut rates three times in 2024. However, progress on inflation has stalled since summer, and the Fed has paused further cuts.
Average hourly earnings rose 0.3% last month, down from a 0.4% increase in January. Fed officials are likely to view the figures as supporting their current wait-and-see approach toward interest-rate cuts. With inflation still modestly above the Fed’s 2% target, several officials have indicated they want to see more progress before cutting rates further.
Steady hiring and economic expansion give the Fed room to remain on the sidelines. Should layoffs increase and unemployment rise, pressure may mount on the Fed to cut rates. On Thursday, Fed governor Chris Waller suggested a rate cut was unlikely at the central bank’s March meeting, emphasizing the need for more data before further action.
Rick Gillespie, chief commercial officer at Revive Environmental Technology LLC, expressed optimism about the company’s prospects despite economic uncertainty. Revive, which currently employs 34 full-time workers, plans to hire 10 to 20 more employees in Columbus, Ohio, and Grand Rapids, Michigan, in the coming months. The company has developed a method to destroy PFAS, a toxic chemical found in everyday items.
Others are witnessing shifts in the economy. Sheela Mohan-Peterson, owner of a Patrice & Associates recruiting franchise, noted an increase in resumes from top-level executives in biotech and high-tech industries. “We’re talking C Suite level,” she said, referring to chief financial officers, chief technology officers, and even a few CEOs. She attributes this trend to federal spending cuts affecting startups reliant on federal grants.
Mohan-Peterson, who acquired her franchise in 2023, observed a cooling job market since then. “2023 was great. There were a lot of jobs around,” she said. “2024, I started to see a slowdown. It was very slight, but toward the end of the year, it became harder to find placements for skilled workers.”
— news from The Associated Press