The U.S. economy added 151,000 jobs last month, nearly 10,000 less than economists predicted, while unemployment was up slightly in the first report of President Donald Trump’s administration.
Unemployment rose to 4.1 percent, above the 4 percent expected, according to the Labor Department’s February jobs report, published Friday morning.
Economists predicted that the number of jobs added last month would be 160,000 ahead of the eagerly awaited employment report. However, the actual figure was lower than expected. The report follows a month of widespread federal layoffs through Elon Musk’s Department of Government Efficiency, tough immigration crackdown, and the reigniting of Trump’s trade war.
Trump’s trade tariffs, which he has since paused for Mexico and Canada, stoked concerns that economic growth is slowing as the markets dipped earlier in the week. Economists have warned that the tariffs will likely push up prices for consumers, potentially rekindling inflation that turned many voters against President Joe Biden and helped return Trump to the White House.
Economists said that it could be too soon for the impact of the DOGE layoffs to show up in the jobs data because the report was based on surveys carried out in the second week of February.
But it still showed a decline of 10,000 jobs in federal employment.
Reaction to Friday’s report was mixed. “We are not putting much stock in the jobs report at the moment,” Byron Anderson, head of fixed income at Laffer Tengler Investments, told CNBC. “Today’s data was mixed at best, but we still have no clarity on the economy moving forward with the Trump turmoil. The longer we have chaos and turmoil from Trump, the higher the probability that we will eventually have data trend negative.”
“Signs of a cooling labor market add to questions about the economy’s trajectory,” said Tahra Jirari, director of economic analysis at Progress Chamber, in post on X.
Wall Street trader Peter Tuchmus said it had been a “brutal” week for the economy but that the jobs numbers were “fairly arbitrary.”
“Any kind of growth in this economy right now, the market is looking for something to grab its teeth on to,” Tuchmas told Schwab Network’s Diane King Hall. “We've had a week that's been really brutal.”
The Trump administration sought to paint a rosy picture, highlighting gains in manufacturing and papering over the losses in the federal sector. “Under President Trump, the private sector is leading the way — 93 percent of the job gains in February were in the private sector," spokeswoman Karoline Leavitt said in a statement. “This is great news for American workers and families.”
Job seekers are struggling at the moment, a report published by the Labor Department Thursday found. Continuing jobless claims - which measures the number of people out of work for extended periods - were pushing a three-year high in January.
Statistics released Wednesday showed that private sector job creation slowed in February. Economists predicted private companies would add 148,000 jobs in February, but the figure was just 77,000.
The news comes as the Federal Reserve's Federal Open Market Committee meets later this month to determine what to do about interest rates. The Federal Reserve spent much of Joe Biden's presidency raising interest rates as a means to combat inflation. In January, it kept interest rates at the same level. A potential drop in employment could trigger faster rate cuts.
Amidst a rocky start to the week on Wall Street, Republicans were laying the groundwork to place the blame at the door of the previous administration before the jobs figures were released.
Treasury Secretary Scott Bessent told former Trump economist Larry Kudlow that the administration inherited “a terrible situation” that would not be fixed overnight during an appearance on Thursday’s Kudlow.
Responding to the bleak jobs forecast, the Fox Business Network host, who served as Trump’s director of the National Economic Council during his first term, warned that Americans are “going to have to suffer — but added it has “nothing to do with Trump.”
Retail giants Walmart and Target warned recently that consumer confidence is low.
Last month Walmart issued a warning for 2025 that it would likely be a slower year for sales and profit and growth than last year. Executives also said that lower-income shoppers were struggling. Target also warned Tuesday of a decline of consumer confidence amid Trump’s tariffs.
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