U.S. adds 151,000 jobs, short of expectations, as federal workforce shrinks
U.S. adds 151,000 jobs, short of expectations, as federal workforce shrinks
The United States added 151,000 jobs in February as employers in a range of industries continued making hires, while the federal government slashed its workforce by 10,000.
The fresh employment data reported Friday by the Bureau of Labor Statistics missed expectations for 170,000 new roles, but last month’s job gains exceeded the revised 125,000 posted in January. The unemployment rate climbed slightly to 4.1% from 4.0% the month before.
The BLS data painted a mixed picture of the labor market. Health care employers added 52,000 roles in February, financial services firms added 21,000, and transportation and warehousing companies added 18,000. But Friday’s report may not fully capture the extent of President Donald Trump’s sweeping policy changes.
“The survey period for this report is around the 12th of the month,” Mark Hamrick, Bankrate senior economic analyst, said in a statement Friday. “Much has happened since then,” he said, nodding to the 62,000 federal job cut announcements flagged Thursday by the consultancy Challenger, Gray & Christmas.
Samuel Tombs, chief U.S. economist at Pantheon Macroeconomics, all but dismissed the BLS report as “a snapshot of a prior age, before the shift in federal government policies undermined confidence.”
Still, analysts broadly sounded a note of measured relief.
“There were fears that today’s jobs report would reveal some deeply unsettling news around the health of the labor market,” Seema Shah, chief global strategist at Principal Asset Management, said in a statement Friday. “Yet, while the worst fears were not met, the report does confirm that the labor market is cooling.”
The sharp decline in government roles, which comes as Elon Musk’s Department of Government Efficiency effort pursues deep cuts to the federal workforce, more than wiped out the 5,000 jobs added there in January. It’s the first time that federal employment has fallen since June 2022.
Some Wall Street firms have estimated the potential job losses triggered by DOGE could ultimately total 500,000, though Barclays analysts have argued that the broader economic impact may be limited. Federal payrolls account for just 1.5% of overall jobs, and even knock-on effects to contractors wouldn’t dramatically alter the labor market picture, they said.
The number of people working part time for economic reasons swelled by 460,000 to hit 4.9 million, the highest level since the pandemic, the BLS found. At the same time, the number of “discouraged” workers — those who want jobs but believe none are currently within reach — shrank by 128,000.
Less than two full months into office, Trump has whipped up storm clouds for the otherwise solid economy he inherited, promising to overhaul it to address voters’ widespread discontent.
Wall Street traders and analysts have increasingly sounded alarms about the impact of policy uncertainty on the economy. But market reaction to Friday’s report was relatively muted. Stocks are likely to close down for the week, having fully erased the gains accrued since Trump won re-election in November.
“We are likely to see some headwinds as we move through the year,” Sarah House, Wells Fargo senior economist, said Thursday ahead of the BLS report. “It’s not just tariffs we’re contending with but also slower immigration. That’s going to affect labor force growth, and then we now have pretty aggressive efforts to curtail government spending.”
Consumer confidence has taken a downturn as households shift more focus from spending toward saving. Meanwhile, the combination of Trump’s still-evolving tariff agenda and the massive job cuts sought by Musk, his multibillionaire adviser, have raised the twin specters of higher unemployment and higher prices, with increasing invocations of stagflation.
In the run-up to Friday’s BLS numbers, two unofficial reports showed a job market that was throttling back: Job cut announcements in February reached their highest one-month level since the depths of the pandemic in mid-2020, the Challenger report found.
Earlier this week, the private sector payrolls processor ADP tallied 77,000 net gains in February, far fewer than the 148,000 forecast. The decline included recent tech layoffs in the information services sector and losses in education and health services — jobs that often rely on federal grants.
“Here you might see some uncertainty as policies are being digested and assessed,” Nela Richardson, ADP chief economist, said in a call with reporters Wednesday. “We don’t know exactly what this represents, but we are seeing a measurable decline in hiring in key sectors of the economy.”
With uncertainty rising, major retailers warn that they’re likely to ask customers to pay for some of the cost increases from Trump’s tariffs. Target and Best Buy raised alarms about that likelihood this week, days before the White House offered temporary reprieves for some of the duties it announced. Walmart, too, has warned it won’t be entirely “immune” from the new import taxes on America’s top trade partners.
The BLS report showed Friday that retailers shed 6,000 jobs, but the sector’s average employment levels have held steady over the past year.
Rob Wile is a Pulitzer Prize-winning journalist covering breaking business stories for NBCNews.com.
J.J. McCorvey is a business and economy reporter for NBC News.
© 2025 NBCUniversal Media, LLC
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US employers add a solid 151,000 jobs last month though unemployment up to 4.1%
A person waits in a line for a prospective employer at a job fair, Thursday, Aug. 29, 2024, in Sunrise, Fla. (AP Photo/Lynne Sladky, File)
WASHINGTON (AP) — U.S. employers added solid 151,000 jobs last month, but the outlook is cloudy 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 was up from a revised 125,000 in January. Economists had expected 160,000 new jobs last month.
The unemployment rate rose slightly to 4.1% as the number jobless Americans rose by 203,000.
Employment rose in healthcare, finance and transportation and warehousing. The federal government shed 10,000 jobs, the most since June 2022, though economists don’t expect Trump’s federal layoffs to have much of an impact until the March jobs report. Restaurants and bars cut nearly 28,000 jobs last month on top of 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 expects hiring to slow and unemployment to creep higher as Trump continues to cut spending on programs and slash the federal workforce, while imposing tariffs on America’s trading partners.
The spending cuts “are likely to spill over into the private sector, hitting contractors and nonprofits, and we still have a trade war that is picking up,’’ House said. “There are multiple battles for the labor market to fight off, multiple shocks it’s having to work through in the months ahead.’’
The economy’s unexpectedly strong recovery from the pandemic recession of 2020 set loose an inflationary surge that peaked in June 2022 when prices came in 9.1% higher than they’d been a year earlier.
In response, the Federal Reserve raised its benchmark interest rate 11 times in 2022 and 2023, taking it to the highest level in more than two decades. The economy remained sturdy despite the higher borrowing costs, defying expectations of a recession, thanks to strong consumer spending, big productivity gains at businesses and an influx of immigrants who eased labor shortages.
The American job market has remained remarkably resilient, but it has cooled from the red-hot hiring of 2021-2023. Employers added a decent average of 168,000 jobs a month last year. But that was down from 216,000 in 2023, 380,000 in 2022 and a record 603,000 in 2021 as the economy rebounded from COVID-19 lockdowns.
Inflation came down – dropping to 2.4% in September — allowing the Fed to reverse course and cut rates three times in 2024. The rate-cutting was expected to continue this year, but progress on inflation has stalled since summer, and the Fed has held off.
Average hourly earnings rose 0.3% last month, down from a 0.4% increase in January.
Fed officials will likely see 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 have made clear in recent remarks that they would like to see more progress before cutting their benchmark rate any further.
Steady hiring and an expanding economy make it easier for the Fed to stay on the sidelines. Should companies start laying off workers and the unemployment rate rise, pressure could rise on the Fed to cut rates.
On Thursday, Fed governor Chris Waller suggested a cut was unlikely at the central bank’s March meeting, adding that Fed officials would like to see more data before making any further moves.
Rick Gillespie, chief commercial officer at Columbus, Ohio-based Revive Environmental Technology LLC, said he is bullish about the prospects for the environmental contamination mitigation and water treatment company despite the uncertain economy.
Revive, which currently has 34 full-time employees, plans to add a total of another 10 to 20 workers in Columbus, Ohio and Grand Rapids, Michigan, in the next few months, Gillespie said. Revive has found a way to destroy a toxic chemical called PFAS that is found in everyday items like nonstick cookware, waterproof weather jackets and cell phones and can end up in landfills, drinking water, and industrial waste water.
Others are seeing a shakeout in the economy.
Sheela Mohan-Peterson, who owns a franchise of the Patrice & Associates recruiting firm, said she’s starting to get more resumes from top-level executives who worked at biotech and high tech companies. “We’re talking C Suite level’’ – chief financial officers, chief technology officers, even a couple of CEOs, she said.
She used to get maybe one of those resumes a month. Since the end of last year, she’s seeing one or two a week. “It has definitely accelerated in the last month,’’ she said. Mohan-Peterson believes its fallout from the chaotic federal spending cuts.
“Especially startups, they do depend on federal grants to get going, and they’re starting to see those disappear or threaten to disappear,’’ she said. “They’re starting to get rid of their high-paid executives so that they can save some money because they can’t count on those grants.’’
A former biotech lawyer, Mohan-Peterson acquired her recruiting franchise in 2023, and she’s seen the job market cool since then. “2023 was great. There were a lot of jobs around,” she said. “2024, I started to see a slowdown. It was very, very slight. But toward the end of the year it started getting harder and harder to find placements for very skilled workers.’’
AP Economics Writer Christopher Rugaber and AP Retail Writer Anne D’Innocenzio in New York contributed to this story.
Copyright 2025 The Associated Press. All Rights Reserved.
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US hiring falls short of expectations in 1st full month of Trump term
The jobs report arrives at a turbulent moment for U.S. stocks, trade relations.
The U.S. added fewer jobs than economists expected in February, the first full month under President Donald Trump, according to government data released on Friday.
Employers hired 151,000 workers last month, falling short of expectations of 170,000 jobs added. The unemployment rate ticked up to 4.1%, which remains a historically low figure.
The stock market appeared to shrug off the solid, albeit disappointing report. Each of the three major stock indexes ticked up on Friday, recovering some of their losses a day earlier.
Hiring picked up from January but fell slightly below the average number of jobs added each month last year.
Speaking hours after the data release, Fed Chair Jerome Powell affirmed the strength of the U.S. economy.
“Despite elevated levels of uncertainty, the U.S. economy continues to be in a good place,” Powell said at the annual U.S. Monetary Policy Forum in New York City. “The labor market is solid.”
Employment increased in a range of sectors, including health care, social assistance and finance, data showed.
However, the federal government shed 10,000 workers in February, indicating potential impact from employee cuts initiated by the Trump administration.
The fresh jobs report arrives during a turbulent period for U.S. stocks and trade relations in the aftermath of tariffs issued by the Trump administration earlier this week.
Despite the temporary withdrawal of some tariffs on Thursday, stocks dropped as fallout from the policy continued to roil markets.
The Dow Jones Industrial Average on Thursday tumbled about 425 points, or 1%, while the S&P 500 fell 1.7%. The tech-heavy Nasdaq sank 2.6%.
The tariffs stand among a flurry of economy-related directives issued since Trump took office, including spending cuts and the targeting of diversity, equity and inclusion initiatives.
The Trump administration has also terminated tens of thousands of federal employees, though such cuts are not expected to appear fully in the February report, in part due to the timing of surveys conducted by officials who collect the data.
Meanwhile, the economy is weathering a bout of resurgent inflation that stretches back to the final months of the Biden administration.
Consumer prices rose 3% in January compared to a year ago, registering a percentage point higher than the Federal Reserve’s target of 2%.
Egg prices, a closely watched symbol of rising costs, soared 53% in January compared to a year ago. Bird flu has decimated the egg supply, lifting prices higher.
In February, a key gauge of consumer confidence registered its largest monthly drop since August 2021, the nonpartisan Conference Board said last month.
The share of consumers who expect a recession within the next year surged to a nine-month high, the data showed. A growing portion of consumers believe the job market will worsen, the stock market will fall and interest rates will rise, the report added.
Still, some measures of consumer sentiment improved. Consumers’ assessment of current business conditions moved higher, while an uptick in purchasing plans for a home extended a monthslong recovery.
Mortgage rates have dropped for seven consecutive weeks, FreddieMac data showed. The average rate for a 30-year fixed mortgage stands at 6.63%, its lowest level since December.
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