WASHINGTON (AP) — U.S. employers added a solid 151,000 jobs last month, but the outlook remains uncertain as President Donald Trump’s policies, including threats of a trade war, federal workforce reductions, and immigration crackdowns, create economic challenges. The Labor Department reported Friday that hiring increased from a revised 125,000 in January, though economists had anticipated 160,000 new jobs. The unemployment rate edged up slightly to 4.1% as the number of unemployed Americans rose by 203,000.
Job gains were seen in healthcare, finance, and transportation and warehousing. However, the federal government cut 10,000 jobs, the largest reduction since June 2022. Restaurants and bars shed 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’s spending cuts and tariffs impact both federal and private sectors.
The economy’s recovery from the 2020 pandemic recession initially fueled an inflationary surge, peaking in June 2022 at 9.1%. The Federal Reserve responded by raising interest rates 11 times between 2022 and 2023, reaching the highest levels 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.
Inflation has since moderated, dropping to 2.4% in September, prompting the Fed to cut rates three times in 2024. However, progress on inflation has stalled, 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 latest figures as supporting their cautious approach to interest-rate cuts. With inflation still slightly above the Fed’s 2% target, several officials have signaled they want to see more progress before reducing rates further.
Rick Gillespie, chief commercial officer at Revive Environmental Technology LLC, expressed optimism despite economic uncertainty. The company, which mitigates environmental contamination and treats water, plans to hire 10 to 20 workers in the coming months.
Meanwhile, Sheela Mohan-Peterson, owner of a Patrice & Associates recruiting franchise, noted an uptick in resumes from top-level executives in biotech and high-tech industries, attributing this to federal spending cuts affecting startups reliant on grants.
— news from WTOP