US Employers Add a Solid 151,000 Jobs Last Month Though Unemployment Up to 4.1%
WASHINGTON (AP) — U.S. employers added solid 151,000 jobs last month, but the outlook is cloudy as President Donald 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.
The job market has been remarkably resilient over the past year despite high interest rates.
“Despite rising concerns about the health of the economy, momentum remains positive,’’ Lydia Boussour, senior economist at the tax and consulting firm EY, wrote in a commentary.
Hiring continued despite high interest rates that had been expected to tip the United States into recession. 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, thanks to strong consumer spending, big productivity gains at businesses and an influx of immigrants who eased labor shortages.
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, a drop likely to be welcomed by the Fed — but not enough to get the central bank to cut rates at its next meeting March 18-19. In fact, Wall Street traders aren’t expecting another cut until May, and they’re not especially confident about that one, according to the CME Group’s FedWatch tool.
Economists say the economic outlook is growing more uncertain as Trump imposes — or threatens to impose — a series of taxes on imported goods.
“Steep tariff increases could cause adjustments in business decisions with knock-on effects on hiring and wages as business leaders navigate higher input costs and retaliatory measures,” Boussour said. “This could lead to a more severe job slowdown, weaker income and restrained consumer spending amidst much higher inflation.’’
