Washington, D.C. — The US labor market showed surprising resilience last month, adding 151,000 jobs despite the beginning of federal workforce cuts under President Donald Trump’s administration.
Key Takeaways:
- US employers added 151,000 jobs in February
- Federal employment dropped by 10,000
- The unemployment rate rose to 4.1% from 4% in January
- Health care and financial firms drove hiring
- The manufacturing sector added about 10,000 jobs
The US labor market has delivered another month of steady job growth, defying expectations amid growing economic uncertainties. While President Trump’s administration has begun implementing long-promised government workforce reductions, the private sector continued to add jobs at a pace consistent with the past year’s trends.
The US labor market has experienced a long-running streak of growth, surprising financial analysts even before Trump took office. The economy has added an average of 168,000 jobs per month over the past year. However, analysts had forecast about 170,000 new jobs for February, making the actual report slightly below expectations.
The Trump administration’s policies have added new pressures to an already complex economic landscape. The president’s changes include tariffs on America’s top three trade partners, some of which have since been reversed, and cuts to federal jobs and spending, efforts that are facing challenges in the courts.
The Report
The Labor Department reported that federal employment dropped by 10,000 in February, while overall hiring remained stable due to growth in other sectors. The unemployment rate ticked up to 4.1% from 4% in January.
The monthly gain in February was similar to the average monthly rise of 168,000 over the past year, the Labor Department said.
Sector Performance
- Health Care: Continued to be a major driver of job growth
- Financial Firms: Added significant positions last month
- Manufacturing: Added about 10,000 jobs, highlighted by the Trump administration
Expert Analysis
Seema Shah, chief global strategist at Principal Asset Management, called the report “reassuringly in line with expectations,” but noted that it confirms that the labor market is cooling.
“Furthermore, with no shortage of headwinds confronting the US economy, the softening trend is likely to persist and may potentially deepen given the toxic combination of federal government layoffs, public spending cuts, and tariff uncertainty related inertia,” Shah warned.
Future Outlook
Analysts caution that the report does not yet reflect the full extent of the cuts announced by the White House. The labor market has been under pressure from price increases, high interest rates, and now, government layoffs.
Government Workforce Reductions
The Trump administration’s efforts to reduce the federal workforce have begun to show impact. Federal employment dropped by 10,000 in February, with more cuts expected in the coming months. The administration has targeted several agencies for reductions, citing the need to streamline operations and reduce costs.
Private Sector Resilience
Despite government cuts, the private sector continued to add jobs at a steady pace. Health care and financial firms were the primary drivers of job growth, while the manufacturing sector also showed strength by adding about 10,000 jobs.
Economic Pressures
The labor market has faced increasing pressures in recent months. Price increases and high interest rates have created challenges for businesses and consumers alike. The Trump administration’s policies, including tariffs and spending cuts, have added to these pressures.
Forward-Looking Indicators
Several indicators suggest that the labor market may continue to cool in the coming months. A measure of manufacturing showed new orders dropping sharply last month. Retail sales posted their biggest drop in two years in January, while foot traffic at major chains such as Target, Walmart, and McDonald’s fell last month, according to data from tracking firm Placer.ai.
The US job market showed resilience in February despite the beginning of federal workforce cuts. However, analysts warn that the labor market is cooling and expect the softening trend to continue, given the current economic pressures.
What’s your take? Will the US labor market continue to cool in the coming months? Share your thoughts. As the US economy faces multiple headwinds, the labor market’s resilience may be tested like never before.
