The US job market continued to grow last month, with economists estimating that employers added 160,000 jobs in February.
This is an improvement from January’s 143,000 jobs but still reflects a slowdown compared to previous years. The unemployment rate is expected to remain at 4%, signaling stability in the labor force.
Despite the steady job growth, concerns about the economy are rising. Trade disputes, government workforce cuts, and immigration policies are adding uncertainty to the outlook. Some experts warn that these factors could slow hiring in the coming months.
Economists point to various influences on the labor market. The recent wave of federal job cuts, led by Elon Musk’s Department of Government Efficiency, is not expected to impact February’s data since the survey was conducted before the layoffs. However, experts predict a noticeable drop in government employment starting in March.
Industries like hospitality and leisure, which suffered setbacks in January due to wildfires in Los Angeles, likely rebounded last month. However, changes in immigration policy could affect labor availability in sectors that rely on foreign-born workers.
The job market has remained strong despite high interest rates, which were raised 11 times between 2022 and 2023 to curb inflation. Although inflation cooled significantly in 2024, recent trends suggest price increases may not be slowing as expected. This has led the Federal Reserve to hold off on further rate cuts for now.
Wage growth also slowed in February, with average hourly earnings rising just 0.3%, down from 0.5% in January. While this may help control inflation, it may not be enough to prompt the Fed to lower interest rates at its next meeting. Investors are now looking ahead to May for a possible rate cut, though uncertainty remains.
As businesses and policymakers navigate these shifting economic conditions, experts warn that job growth may not remain steady for long. The coming months will reveal whether the economy can maintain its resilience or if new challenges will slow progress.