US employers add 151,000 jobs last month, but unemployement rises to 4.1%
U.S. employers added 151,000 jobs last month, but economic uncertainty looms as President Trump threatens a trade war, implements federal workforce cuts, and plans deportations. The unemployment rate rose slightly to 4.1%.
U.S. employers added 151,000 jobs last month, signaling steady job growth despite ongoing economic uncertainties. The hiring figures, reported by the Labor Department, exceeded the revised 125,000 jobs added in January but fell short of economists’ expectations for 160,000 new jobs.
The slight rise in unemployment to 4.1% and the growing number of jobless Americans add to concerns over the broader economic outlook, which is heavily influenced by President Trump's policies, including potential trade wars and cuts to the federal workforce.
Employee increased in the U.S. despite unemployment
U.S. employers added 151,000 jobs last month, but economic uncertainty remains as President Trump threatens a trade war, reduces the federal workforce, and plans mass deportations. The Labor Department reported a rise from January’s revised 125,000 to 151,000 new hires, but this fell short of the expected 160,000.
Unemployment increased slightly to 4.1%, with jobless Americans rising by 203,000. Employment grew in healthcare, finance, and transportation, while the federal government saw a loss of 10,000 jobs. Restaurants and bars cut nearly 28,000 jobs on top of 30,000 lost in January.
Senior economist Sarah House from Wells Fargo noted that while the labor market remains stable, it's still far from pre-pandemic levels. House anticipates hiring will slow, and unemployment may rise further as the effects of spending cuts, a trade war, and tariff implementation unfold.
The economy’s recovery from the 2020 pandemic recession led to an inflation surge, peaking in June 2022 at 9.1%. In response, the Federal Reserve raised interest rates 11 times in 2022 and 2023, bringing them to the highest levels in over 20 years. Despite higher borrowing costs, the economy has remained strong due to consumer spending, productivity gains, and an influx of immigrants easing labor shortages.
The job market has cooled compared to 2021-2023. Employers added 168,000 jobs per month on average in 2024, down from 216,000 in 2023, and 380,000 in 2022. Inflation dropped to 2.4% in September, prompting the Fed to reverse course and cut rates three times in 2024. However, inflation has stalled since summer, and rate cuts are on hold.
Average hourly earnings rose by 0.3% in February, lower than January’s 0.4% increase. The Federal Reserve is expected to take a cautious approach toward further interest rate cuts due to inflation still slightly above the 2% target.
While steady hiring and a strong economy support the Fed’s wait-and-see stance, rising layoffs and an increasing unemployment rate could lead to pressure to cut rates further. Fed officials have indicated they want more data before acting, with Governor Chris Waller suggesting a rate cut is unlikely in March.
Some companies, like Revive Environmental Technology in Ohio, are still optimistic, planning to add 10 to 20 workers despite the uncertain economy. However, others are struggling, with some seeing increased layoffs, particularly in biotech and high-tech sectors, due to disrupted federal funding.
Mohan-Peterson, who runs a recruiting franchise, has noticed an uptick in resumes from high-level executives seeking new opportunities, especially from startups affected by cuts to federal grants. She believes the job market, particularly for skilled workers, is cooling and may continue to slow as 2024 progresses.