Job growth in the United States continued last month, but at a slower pace than expected, raising concerns about the future of the economy. The Labor Department reported that employers added 151,000 jobs in February, with the unemployment rate ticking up slightly to 4.1%, from 4% in January. While the report signals ongoing job growth, the weaker-than-expected numbers have sparked questions about the strength of the labor market.
Analysts had anticipated the addition of around 170,000 jobs, making February’s growth rate fall short of projections. The 151,000 new jobs is close to the average monthly gain of 168,000 over the past year, according to the Labor Department. The growth was largely driven by health care and financial services, while government hiring saw a sharp slowdown, with federal employment falling by 10,000. Experts noted that the report likely does not yet reflect the full impact of cuts announced by the White House.
Seema Shah, chief global strategist at Principal Asset Management, described the report as “reassuringly in line with expectations” but warned that it indicates the labor market is cooling. “While the worst fears were not met, the report confirms that the labor market is softening,” she said. Shah also pointed to several economic challenges, including federal layoffs, public spending cuts, and ongoing uncertainties surrounding tariffs, which may contribute to a prolonged slowdown.
Even before the Trump administration’s policy changes, the U.S. labor market had surprised many analysts with its resilience, particularly in the face of rising prices and high interest rates. However, since President Trump took office, his economic policies—such as tariffs on major trade partners and cuts to federal jobs and spending—have created additional uncertainty. While some of these policies have been reversed, they have contributed to instability in financial markets, negatively affecting consumer sentiment and impacting various economic indicators.
Recent data has highlighted broader economic concerns. A key measure of manufacturing showed a sharp decline in new orders, and retail sales saw their largest drop in two years in January. Additionally, foot traffic at major retailers such as Target, Walmart, and McDonald’s fell last month, according to tracking firm Placer.ai.
In another sign of economic stress, the firm Challenger, Gray & Christmas reported that layoffs in February surged to their highest level since July 2020, driven in part by government cuts. While the job market remains positive overall, these developments suggest that economic challenges are mounting as policymakers face tough decisions.
