The U.S. economy added 151,000 jobs in February, while the unemployment rate ticked up to 4.1 percent, marking the first jobs report of President Trump’s second term.
Released on Friday by the Labor Department, the report showed that the job market remained stable despite mounting concerns over the economy and declining consumer confidence. Many economists had predicted a gain of around 150,000 jobs along with a slight increase in unemployment. However, fears of a weaker-than-expected report were high after recent economic data signaled sluggish growth, federal job cuts, and the effects of Trump’s new trade tariffs.
Adding to these concerns, corporate layoff reports surged, with employment firm Challenger, Gray & Christmas noting a significant rise in job cuts. Some economists believe the full impact of mass federal layoffs due to Trump administration staffing reductions has yet to appear in the data but will likely show up in the next report.
“The federal layoffs we’ve been hearing so much about will begin showing up in next month’s release,” said economist Elizabeth Renter from NerdWallet. Kevin Rinz, a senior fellow at the Washington Center for Equitable Growth, agreed, stating that while it’s difficult to measure the extent of federal job losses so far, their effects on the private sector are unlikely to be reflected in this report.
The report also included revisions to previous months’ numbers. January’s job gains were lowered by 18,000 to 125,000 new jobs, while December’s numbers were adjusted up by 16,000 to 323,000 jobs.
Some industries showed continued strength, with health care adding 52,000 jobs, financial services growing by 21,000, and transportation and warehousing contributing 18,000 new positions. However, reactions among economists were mixed. Some pointed to steady payroll growth as a sign of resilience, while others saw warning signs in the rising unemployment rate.
“The solid expansion in payrolls in February highlights that the negative impact of tariff hikes and policy uncertainty on economic activity at the macro level is not going to be felt for quite a while,” said Brian Coulton, chief economist at Fitch Ratings.
However, Joe Gaffoglio, CEO of Mutual of America Capital Management, was more cautious. “The labor market is showing signs of weakness with hiring across sectors,” he noted. “Deteriorating indicators like hiring intentions, new job listings, and temporary staffing suggest a potential slowdown in employment growth.”
Wages continued to rise, increasing by 0.3 percent in February, bringing the average hourly wage to $35.93. Over the past year, wages have climbed 4 percent, with a 3.6 percent increase over the past three months.
A broader measure of unemployment, known as the U-6 rate—which includes part-time workers and those only marginally attached to the workforce—rose to 8 percent, the highest level since 2021.
Other economic red flags have appeared as well. Inflation has crept back up to 3 percent annually, and a recent gross domestic product (GDP) estimate from the Atlanta Federal Reserve is predicting negative growth for the first fiscal quarter of 2025. These factors have raised concerns about whether the economy can maintain momentum, especially as businesses and consumers continue to navigate policy shifts under the new administration.