The US economy added 151,000 jobs last month and the unemployment rate rose to 4.1%

• The US economy added 151,000 jobs last month, according to the latest jobs report, the first full monthly tally of the labor market under Donald Trump’s second presidential term.

• Economists had forecast 160,000 jobs were added in February and that the unemployment rate held at 4%.

• The report comes as the Trump administration continues its large-scale slashing of government jobs and back and forth over its trade policy, both of which are unsettling businesses and households and putting undue pressure on the economy.

Our live coverage of the February jobs report has ended. Read more here.

The month of March kicked off with a miserable week on Wall Street but limped into the green late Friday.

US stocks rose Friday after an afternoon rally. The Dow closed at 42,802, up 0.52%. The broader S&P 500 gained 0.55% and the Nasdaq Composite was 0.7% higher.

Yet the three major indexes were all down on the week and the benchmark S&P 500 posted its worst week since September.

US stocks were volatile this week as back-and-forth tariff announcements draped a “fog of uncertainty” over investors, consumers and businesses, according to Kevin Gordon, senior investment strategist at Charles Schwab.

The lack of clarity around the Trump administration’s trade policy drove the rollercoaster week for markets, with stocks fluctuating between gains and losses.

Investors are still “feeling vulnerable” due to the uncertainty around tariffs, said Sam Stovall, chief investment strategist at CFRA Research.

“It’s not something you can project, like a price chart or like an earnings forecast — it is what the president wants to do,” he said.

While stocks rallied Friday afternoon on positive comments from Federal Reserve Chair Jerome Powell, it wasn’t enough to erase the downturns over the past week.

“Bull markets don’t die of old age. They die of fright,” said Stovall.

US stocks rose in afternoon trading, gaining steam to close out a rollercoaster week.

The Dow rose 240 points, or 0.56%. The S&P 500 and the Nasdaq Composite each gained about 0.5%.

The afternoon gains come at the tail-end of a brutal week for markets.

Stocks had seesawed on head-spinning announcements from the Trump administration about tariffs. And, on Thursday, a bout of uncertainty over spending on artificial intelligence contributed to the Nasdaq Composite closing in correction territory.

Yet Friday midday, Federal Reserve Chair Jerome Powell, whose every word is watched by investors, said the US economy was doing fine despite uncertainty.

The comments from Powell helped shift momentum toward a rally. The Dow, which had tumbled almost 400 points in the morning, turned into the green.

Kevin Gordon, senior investment strategist at Charles Schwab, said that after a large decline in markets, such as Thursday’s rout, a “reflexive bounce is somewhat normal.”

The Dow, S&P 500 and Nasdaq are all still on track for their worst week since September.

President Donald Trump on Friday touted the February jobs report, highlighting the estimated 10,000 manufacturing jobs added versus 10,000 federal government jobs lost.

In doing so, he lobbed a familiar — but highly misleading — claim about one of the biggest job generators in recent years.

“Under the final two years of Biden, one in every four jobs created in America was a government job,” Trump said from the Oval Office Friday morning.

While 26% of the past two years’ job gains were in the government sector, the lion’s share of those public sector gains took place in state and local government employment (including schools and hospitals) — not the federal workforce.

In 2023 and 2024, state-level government employment (which has a workforce of 2.6 million) increased by 376,000 jobs, accounting for 8% of the overall job gains, Bureau of Labor Statistics data shows.

Local governments (where 15.1 million people work) saw net growth of 672,000 jobs in that period, accounting for 15% of the nationwide gains.

The federal government (3 million workers) added 139,000 jobs, representing a 3% share of the national gains.

Federal Reserve Chair Jerome Powell said Friday that the way the US economy responds to the Trump administration’s barrage of policy changes, including tariffs, will ultimately determine the Fed’s reaction function.

He said rising inflation expectations could force the central bank to not “see through” those policy changes, meaning the Fed could start to hike interest rates again. Other Fed officials have said as much in recent speeches, stating that it’s crucial for Americans to keep faith that inflation will eventually normalize in the long run.

In opening remarks, Powell said “it is the net effect of these policy changes that will matter for the economy and for the path of monetary policy.”

“It’s not simply what’s happening with tariffs, it’s what’s happening with growth and all the other things as a result of these broad changes in economic policy, not just tariffs,” Powell said.

Even for some businesses seeing strong revenue growth, the current political and economic climate is too volatile to allow for hiring.

That’s the case for Minneapolis, Minnesota-based Astropad, which sells hardware and software productivity tools for reading, writing and drawing, such as Rock Paper Pencil, a textured iPad screen protector coupled with a custom ballpoint Apple Pencil tip that replicates the sensation of writing and drawing on paper.

The company, founded in 2013 and boostrapped from the outset, has grown to about a dozen employees and notched a 40% sales gain last year. However, Astropad has had to hold off on adding more workers, because it is heavily exposed to the effects from higher tariffs.

It manufactures most of its hardware products in China, in part because the US supply chain for the products needed are limited or non-existent.

“One day, it’s tariffs on China; the next day, it’s tariffs on Canada and Mexico; and they’re off, and then they’re on again,” Matt Ronge, Astropad’s co-founder and chief executive officer, told CNN. “So, that really puts us in a holding pattern where we want to see what happens.”

It’s been a whirlwind week for markets, and the swings continued on Friday.

US stocks pared losses in midday trading as Fed Chair Jerome Powell gave remarks that signaled he is confident about continued economic growth.

“Despite elevated levels of uncertainty, the US economy continues to be in a good place,” Powell said at an event hosted by the University of Chicago.

The Dow gained around 85 points, while the S&P 500 and Nasdaq Composite both ticked up by around 0.1%

America is feeling uneasy about the Trump administration’s rapid-fire trade policy changes, but Federal Reserve Chair Jerome Powell said Friday he’s not worried.

“Despite elevated levels of uncertainty, the US economy continues to be in a good place,” Powell said at an event hosted by the University of Chicago.

Citing the administration’s policy focus of trade, immigration, fiscal policy, and regulation, Powell said “it is the net effect of these policy changes that will matter for the economy and for the path of monetary policy.”

“While there have been recent developments in some of these areas, especially trade policy, uncertainty around the changes and their likely effects remains high,” he added. “As we parse the incoming information, we are focused on separating the signal from the noise as the outlook evolves.”

The White House said Friday that America’s manufacturing industry is staging a comeback, after the Labor Department reported that manufacturers added 10,000 jobs in February.

“We’ve not only stopped the manufacturing collapse, but we’ve begun to rapidly reverse it and get major gains,” President Donald Trump said in comments from the Oval Office on Friday.

“These aren’t government jobs, which actually we cut. These are private sector manufacturing jobs. So we gained all of those jobs, 10,000 jobs, and we barely started yet. That’s very unusual.”

But it takes more than one or two months to make a trend, and so far, that’s all there has been — just a few months of somewhat positive data for manufacturing.

Prior to February, employment in the industry contracted for two consecutive months, shrinking by 15,000 jobs. February’s tally didn’t even recover the jobs lost during that period.

But it’s still too soon to even claim that this is Trump’s economy — at least according to Commerce Secretary Howard Lutnick.

“We are in the middle of March,” Lutnick told CNBC Wednesday. “My president took over Jan. 20. You think economic data coming out in early March is Donald Trump-related data?”

The Trump administration also pointed to the Institute for Supply Management’s latest manufacturing survey showing that the industry expanded in February for the second-straight month, after shrinking for 26 months. But that same survey showed that manufacturers are on edge over Trump’s whipsawing tariff policies and their write-in responses weren’t very rosy.

“Customers are pausing on new orders as a result of uncertainty regarding tariffs. There is no clear direction from the administration on how they will be implemented, so it’s harder to project how they will affect business,” one transportation manufacturer said.

The February jobs report painted a picture of a pretty solid and stable labor market, but one that shows some softness.

The jobless rate ticked up, the labor force participation rate dipped, the employment-to-population ratio fell, average workweek hours dropped, the number of part-time workers for economic reasons increased and the number of multiple jobholders was on the rise.

“It does suggest to me that some employers are cutting back on hours rather than cutting jobs outright, that that the demand for workers is fairly soft,” Julia Pollak, chief economist at employment site ZipRecruiter, told CNN in an interview.

However, that’s not the case in all industries. Leisure and hospitality businesses lost jobs for the second consecutive month, driven by cuts at restaurants and bars.

Restaurants lost 27,500 jobs in February, piling on to the 29,500 jobs lost in January (which was the biggest monthly hit since Covid times), BLS data shows.

Small businesses, especially those in food service, have struggled with the lingering effects of high inflation and especially high interest rates, she said.

“Restaurant jobs often serve as an entry point into the labor market, giving people a leg up,” she said. “The struggles of restaurants, it’s not a coincidence that they are accompanied by a decline in the participation rate. I think there are people on the sidelines who would be coming into work if that first rung of the ladder were strong.”

Consumer spending fell in January for the first time in nearly two years and saw the biggest monthly drop-off since February 2021, according to Commerce Department data released last week.

US stocks tumbled midday Friday as markets continued to be battered by a sell off.

The Dow fell 385 points, or 0.9%, in midday trading. That leaves the Dow down more than 3.5% this week, on track for its worst week since March 2023.

The broader S&P 500 fell 1.22% and the Nasdaq Composite slid 1.62%.

Both the S&P 500 and Nasdaq are on track for their worst week since September 2024.

Friday’s jobs report indicated a solid economy with some cracks to watch for, “especially if business and consumer uncertainty transition to slower spending,” according to Rob Haworth, senior investment strategist at US Bank Wealth Management.

While the jobs report was solid, all three major indexes slumped as Wall Street wrestled with uncertainty from President Donald Trump’s tariffs. The VIX, Wall Street’s fear gauge, popped higher after closing on Thursday at its highest level this year.

“The stock market is moving in lockstep with tariff headlines, and that is likely to keep volatility very elevated for the foreseeable future, as the market does not like uncertainty,” said Glen Smith, chief investment officer at GDS Wealth Management.

As investors waited for markets to open Friday morning, a major stock exchange announced plans to offer 24-hour trading, another sign of a shift in the industry toward around-the-clock access to markets.

Nasdaq plans to offer 24-hour weekday trading on its namesake Nasdaq Stock Exchange, joining a growing number of exchange operators looking to cater to new investing habits.

The plan is pending regulatory approval and coordination with other industry players, and the expectation is to offer 24-hour trading beginning in the second half of 2026, according to a post on LinkedIn by Nasdaq President Tal Cohen.

Nasdaq is trying to expand its trading hours due to increased retail investing and foreign investors demanding US stocks, Cohen said. In the past five years, 56 exchange-traded products that track the Nasdaq 100 have launched, and 98% of them were introduced outside the United States, according to Cohen.

“Attracting more investment to our markets presents a compelling opportunity for both the U.S. and global economy,” Cohen said. “It is therefore incumbent on us to enhance access for those operating across different time zones.”

The announcement comes on the heels of other major exchange operators expanding their hours. The New York Stock Exchange announced in October that it would plan to offer trading 22 hours a day, five days a week. In February, Cboe Global Markets announced plans to offer trading on its US equities exchange 24-hours, five days a week.

The shift toward 24-hour trading is reflective of past years’ boom in platforms like Robinhood, which allow retail investors to trade at any time.

“As the industry considers the growing interest in 24-hour trading, we stand at yet another pivotal moment — one that has the potential to broaden investor access, expand wealth-building opportunities and redefine how markets function,” Cohen said.

US stocks slid Friday as investors looked to close out a choppy week of trading.

All three major indexes tumbled after bouncing around in morning trading.

The Dow fell about 240 points, or 0.57%. The S&P 500 fell 0.74% and the Nasdaq Composite slid 0.87%, putting it back in correction territory.

Wall Street is parsing through fresh jobs data that showed growth, but potential cracks in the economy, like increased government layoffs due to the Department of Government Efficiency.

“The unemployment rate rose, and the details of the survey behind it were weaker than the headline,” said Bill Adams, chief economist at Comerica Bank.

“The markets should breathe a sigh of relief that there wasn’t a shock in either direction and the report was a mixed bag,” said Gina Bolvin, president of Bolvin Wealth Management Group.

Markets have whipsawed this week as investors try to make sense of the Trump administration’s mixed messaging about tariffs. The S&P 500 and Nasdaq are both on track for their worst week since September.

“We’ve been counseling clients since the end of last year that 2025 was likely to be a volatile year because of policy uncertainty and so far, that’s exactly what we’ve seen,” said Chris Zaccarelli, chief investment officer at Northlight Asset Management.

Investors will be attuned to remarks at 12:30 p.m. from Federal Reserve Chair Jerome Powell to try and gauge the central bank’s outlook for the economy.

After the US presidential election, consumer and business sentiment shot higher, and hiring activity was on the rise, according to an array of surveys and economic data.

But the “Trump bump” has given way to rising levels of economic uncertainty from businesses and consumers who are reporting jitteriness about the effect of sweeping policy actions such as broad-based tariffs, the direct and ripple effects from slashing federal jobs and funding and mass deportations.

While it’s too soon to tell what the economic impacts will be from these moves, the unknowns can deter businesses’ plans for expansion, said Martha Gimbel, economist and executive director and co-founder of the Budget Lab at Yale University.

“At a time where there is such uncertainty about government spending, where there is such uncertainty about tariffs, why would you make investments in your future workforce when you don’t know what the economic situation is going to be and you don’t know what your needs are going to be?” Gimbel told CNN. “You’re starting to see more and more people seem to be moving toward a batten-down-the-hatches mentality.”

Several Federal Reserve officials gave their assessment of the US economy this week as the Trump administration unnerved investors with its back and forth on tariffs.

Most officials acknowledged the uncertainty bedeviling businesses and consumers from whipsawing trade policy. Some said they’re paying close attention to consumers’ expectations of inflation in the coming years, stressing that it’s important for Americans to keep faith that inflation will continue to normalize.

One influential policymaker said further rate cuts this year remain on the table.

US stocks opened lower Friday as investors digested key data about the health of the labor market.

The Dow opened 0.3% lower, down by around 75 points. The broader S&P 500 opened 0.2% lower and the tech-heavy Nasdaq Composite fell by 0.1%.

The US economy added 151,000 jobs last month, an increase from January’s revised gains of 125,000 jobs, but slightly below forecasts.

The fresh jobs data, which shows solid economic growth, comes as Wall Street looks to reverse a broad decline in markets on Thursday that saw the Nasdaq enter correction territory.

“Markets breathed a sigh of relief this morning that the jobs data wasn’t worse than expected,” said Chris Zaccarelli, chief investment officer at Northlight Asset Management, in a note.

The relief might be brief, however, as investors are also grappling with continued uncertainty from President Donald Trump’s tariffs. The S&P 500 is on pace for its worst week since September after a choppy week of back-and-forth announcements about tariffs.

Investors also parsed through data that showed cuts by the Department of Government Efficiency beginning to take effect.

“While strong, the jobs market will slow considerably with government in cutting mode,” said Jamie Cox, managing partner at Harris Financial Group.

David Russell, global head of market strategy at TradeStation, said investors still “see clouds on the horizon.”

“Tariffs threaten jobs because they threaten supply chains and profits,” Russell said. “Uncertainty is in a bull market.”

While February’s jobs total showed solid growth, there is “potential trouble brewing beneath the surface” of the labor market, said Indeed Hiring Lab economist Cory Stahle.

Inflation is stuck above the Federal Reserve’s target of 2%, layoffs are at historic highs, consumer confidence has plunged, people who get laid off are finding it difficult to get work quickly and markets are fatigued by President Donald Trump’s back and forth on tariffs.

“The full impacts of all the new policies, proposals and abrupt reversals that are the hallmarks of this administration will begin to shape the official statistics,” Stahle wrote in commentary issued Friday. “The ability of the market to continue to maintain its ‘business as usual’ momentum will be tested, and the anticipated soft economic landing continues to hang in the balance.”

Employers across most industries continued to add jobs at a brisk pace last month, according to fresh Labor Department data released Friday.

Private education and health services added the most jobs last month, with headcount growing by 73,000. Most of those gains were driven by health care employers, specifically ambulatory health care service providers, hospitals and nursing facilities.

The financial activities industry also helped drive job gains last month, adding 21,000 jobs. That was “above the prior 12-month average gain of 5,000,” according to a release.

Leisure and hospitality lost the most jobs in February, with employment shrinking by 16,000. Food and beverage retailers also cut a sizable number of jobs last month, declining by 15,000, which was “largely due to strike activity,” the Labor Department said.

The job cuts by Elon Musk’s government efficiency team began to show up in this latest batch of employment data. Federal government employment shrank by 10,000 jobs, but government employment overall, including at the state and local level, grew by 11,000 in February.

As America’s population ages, health care has continued to be a big driver of job growth.

But President Donald Trump’s push to rein in federal spending, as he aims to extend his costly 2017 tax cuts, threatens to curtail that same source of labor-market strength.

House Republicans are advancing a budget that would bring major cuts to Medicaid, a federal program used by 72 million Americans — which also supports tens of millions of jobs. Experts say the program will likely suffers cuts at some points, but it’s unclear how exactly spending will be reduced and how quickly those cuts will begin to affect providers.

House Speaker Mike Johnson told CNN’s Kaitlan Collins last month that he will abide by Trump’s promise to not slash Social Security, Medicare or Medicaid, but said that “what we are going to do is go into those programs and carve out the fraud, waste and abuse, and find efficiencies.”

For the past few years, health care has been America’s top job creator. In February, health care added a robust 52,000 jobs, the Labor Department said Friday.

The lower-than-expected job total for February and the loss of 10,000 federal workers over the past few weeks shows how President Donald Trump’s policies have impacted the labor market.

“The economy is off to a slow start under the new president,” said Chris Rupkey, chief economist at FwdBonds. “You can’t have mass firings of federal workers and government contractors and think it is not going to mean job losses for the private sector.”

“Jobs are headed in the minus direction if migrants are sent home, because the US population bust means there are no native born Americans to take those jobs,” Rupkey wrote in a note Friday. “Changing the pattern of migration from in to out means fewer workers to build houses, wash dishes in restaurants and comfort your mother in hospice care.”

President Donald Trump’s effort to cut federal government spending by eliminating jobs as part of the Elon Musk-led Department of Government Efficiency drove federal employment lower last month, declining by 10,000 jobs. That represents the worst month of federal government hiring since June 2022.

Of those 10,000 cuts, 3,500 were postal workers. Musk has been advocating for privatizing the US Postal Service, saying earlier this week “we should privatize anything that can reasonably be privatized.”

Federal government cuts are likely to continue to weigh on future employment reports as DOGE looks to cut the headcounts at more government agencies.

Stock futures gained after Friday’s report from the Labor Department showed solid job growth in February.

Dow futures rose 0.1% and S&P 500 futures gained 0.3%. Futures tied to the Nasdaq 100 gained 0.5%.

The US economy added 151,000 jobs last month, an increase from January’s revised gains of 125,000 jobs. The unemployment rate ticked up to 4.1%.

Investors are looking for positive signs about economic growth after a rocky week on Wall Street — driven by tariff uncertainty — that has left all three major indexes in the red.

The US economy added 151,000 jobs last month, an increase from January’s revised gains of 125,000 jobs, according to Bureau of Labor Statistics data released Friday.

Economists were expecting that job growth would pick up.

The unemployment rate ticked up to 4.1% from 4% the month before.

Recent economic data has shown that uncertainty and layoffs are on the rise amid some monumental policy shifts from the Trump administration.

President Donald Trump seems to be threatening new tariffs each week on friends and foes alike, on an ever-growing list of products. Administration officials hint at compromises, only to be contradicted by the boss.

Some tariffs kick in. Others fade away after “very good” phone calls. And yet others are watered down after complaints from CEOs.

It’s hard to imagine a more perplexing backdrop for businesses trying to make decisions about the future. Should they hire or fire workers? Should they expand or retreat? Will they need to raise prices or can they hold steady?

“It’s frustrating and stressful,” Trevor Frampton, who owns a feed and pet supply store in Santa Rosa, California, said of the back-and-forth nature of the tariff threats.

Frampton told CNN he’s monitoring the trade developments closely because he fears these import taxes will force him to lift prices on pet food and other items at a time when many customers are already feeling financial pressure.

Trade policy uncertainty, as measured by an index that counts news articles mentioning the topic, spiked after President Donald Trump won election in November.

That index has kept surging, surpassing not only what was seen during Trump’s first term but at any point since tracking began in 1960.

The chaos is rattling the increasingly turbulent stock market and starting to show up in economic reports.

“It feels like the economy is gagging on the uncertainty. And the longer the uncertainty hangs around, the more likely the economy is going to start choking,” Mark Zandi, chief economist at Moody’s Analytics, told CNN’s Kate Bolduan earlier this week, referring to not just trade uncertainty but that over taxes, immigration and federal budget cuts.

The labor market has so far shown resilience and stability in the face of the dual pressures of fast-rising prices and high interest rates — not to mention a once-in-a-generation pandemic.

The unemployment rate is low, the employment-to-population ratio is high, productivity has increased and wage gains have helped people catch up after years of higher-than-typical inflation.

Job gains have slowed (as expected), but the labor market has not collapsed. In fact, it has been so solid that it has helped fuel consumer spending and helped the economy potentially achieve the first “soft landing” (beating inflation without triggering a recession) in decades.

But concern does linger: Despite low levels of layoffs, hiring has fallen off, which has resulted in unemployed people not finding jobs as quickly as they previously did.

If there were to be a sudden turn in the economy, there would be little buffer for businesses to make a change, since they’re already hiring like they’re in a recession.

Wall Street’s miserable March improved Friday after investors spent the week trying to make sense of the White House messaging on its trade policy.

As a week full of uncertainty about President Donald Trump’s tariffs draws to a close, futures tied to all three major indexes moved higher ahead of the jobs report.

After making good on his threat of a 25% tariff on all goods from Mexico and Canada, effective Tuesday, Trump on Thursday announced a nearly one-month tariff delay on all products from covered by his USMCA free trade treaty.

Mexico’s President Claudia Sheinbaum said Thursday that “virtually all” of Mexico’s trade with the United States is included in that agreement, but a White House official added some nuance, noting that about 50% of imports from Mexico and 36% of imports from Canada are covered.

However, many more items — such as avocados — are generally not covered because of the high cost of of compliance. Those items not in compliance with the USMCA have in effect been treated at customs as if they were, or they weren’t subject to tariffs.

Meanwhile, Canada said it would not lift the retaliatory tariffs it had slapped on imports from the US, with Prime Minister Justin Trudeau saying they would remain in place unless Trump rolls back his tariffs for good, and not just temporarily.

The complications of the trade policy and the heated back and forth between the US and its closest trading partners has clearly fatigued markets, with the Dow down almost 3% on the week as of Thursday’s close and the S&P 500 and Nasdaq both on pace for their worst week since September 2024.

But Trump and his top lieutenants have said they aren’t swayed by Wall Street’s reaction to the tariff negotiations.

US Treasury Secretary Scott Bessent told the Economic Club of New York on Thursday that “Wall Street’s done great, Wall Street can continue doing well. But this administration is about Main Street.” Commerce Secretary Howard Lutnick told CNBC in an interview “The fact that the stock market goes down a half a percent or a percent, it goes up a half a percent or percent — that is not the driving force of our outcomes.” And for his part, Trump said Thursday “I’m not even looking at the market.”

The US economy is forecast to have added 160,000 jobs in February, with an unemployment rate unchanged from January’s 4%. That would be a solid report on the labor market.

But the background picture is getting increasingly fuzzy: The Trump administration’s fast and massive policy shifts — including massive federal layoffs, funding cutbacks, a back-and-forth on tariffs, and mass deportations — are spilling over into the broader economy, with several data points flashing some warning signals.

Consumer sentiment has plunged, spending dropped more than expected in January, employers announced a recession-level amount of layoffs in February (with at least one-third coming from the federal government), and a GDP forecast turned negative.

President Donald Trump’s new Department of Government Efficiency, helmed by billionaire Tesla CEO Elon Musk, has been working with speed to eliminate a gigantic swath of federal workers.

However, the impact of those layoffs is not likely to make a big splash in February’s jobs report.

That’s partly because of timing: The bulk of the cuts didn’t happen until after the survey period (which is the week of the 12th). And those that did might not show up anyway: Workers are counted as employed if they received pay for any part of the pay period that includes the 12th day of the month. Also, some federal workers are serving out a paid notice period where they essentially quit but won’t be unemployed weeks or even months from now.

The February report could certainly show some weakness in the federal sector, though. And it’s possible that some key areas of the economy, including health care, could show some stress from spending pullbacks related to government cuts.

One economist cautioned that the funding cuts could result in job growth being “close to zero” in February. The majority of economists, however, believe job gains should run north of 100,000.

Ever since the Covid-19 pandemic, it’s been much harder for economists to nail down economic forecasts. Friday’s jobs report is no different.

Even though there may be minimal federal employment impacts from the Trump administration’s moves to-date, some economists caution that those actions could show up in other areas.

Dean Baker, economist and co-founder of the Center for Economic Research, said that federal spending cutbacks could be spilling over to hiring pullbacks in the private sector.

“Many businesses have put hiring plans on hold; this is especially true in the health care sector, but we could see similar trends with state and local governments, universities, and other sectors that rely on federal support,” Baker wrote in commentary earlier this week.

“It is not out of the question for job growth to be close to zero in February, and we may also see a modest uptick in the unemployment rate.”

Payroll giant ADP’s latest employment report showed that hiring activity in the US private sector slumped in February.

Private-sector employment increased by an estimated 77,000 jobs in February, according to ADP. That’s a dramatic drop-off from the strong job growth of 186,000 seen in January and barely half the 142,500 net gain that economists had expected, according to FactSet estimates.

Service-based industries tied heavily to consumer activity saw some of the biggest employment declines, ADP noted.

“I know there’s been a lot of attention to tariffs, new policies being enacted even this week, but we can’t lose sight also of the biggest driver of the economy, which is consumers,” Nela Richardson, chief economist at ADP, said Wednesday, after the report was released.

US-based employers announced plans to slash 172,017 jobs in February, according to Challenger, Gray & Christmas’s latest monthly job cuts report released Thursday.

That’s a 103% increase from a year ago and the highest February total since 2009.

It’s the 12th highest monthly total in the 32 years Challenger has been tracking job cuts. The 11 others (four came during the Covid-19 pandemic) all occurred when the US was in a recession, Challenger data shows.

The largest share of job cut announcements came in the government sector, where the newly formed Department of Government Efficiency has axed jobs, slashed federal spending and scrapped contracts.

By Challenger’s count, there were 62,242 announced cuts across 17 federal agencies. That’s a 41,311% increase from the 151 cuts announced through February 2024, Challenger noted.

The DOGE effect was not limited to the public sector: Downstream impacts, such as the loss of funding for private nonprofits, led to another 894 cuts, according to the report.

Outside of the government, the next largest cuts were in retail (38,956), technology (14,554) and consumer products (10,625).

Thursday’s report is “something to be concerned about,” said Gregory Daco, chief economist at EY Parthenon, noting that the government cuts accounted for one-third of the overall announced layoffs.

“That in itself is something that is concerning and does portend a shift in the way employers are approaching this labor market,” he said.

Andrew Challenger, senior vice president at Challenger, Gray & Christmas outplacement and executive coaching firm, said in a statement: “With the impact of the Department of Government Efficiency actions, as well as canceled government contracts, fear of trade wars, and bankruptcies, job cuts soared in February.”

In addition to the monthly employment snapshot from the government, economists also are closely watching the weekly unemployment claims filings as a gauge of labor market health.

The latest jobless claims data shows that layoff activity remains muted and in line with what was seen pre-pandemic and below historical averages.

The number of initial claims dropped last week by 21,000 to 221,000, according to a separate report released Thursday by the Labor Department.

That report did show an increase in the number of federal workers who filed for unemployment (that particular data lags by a week). The number of federal workers who filed initial claims under the Unemployment Compensation for Federal Employees program totaled 1,634 for the week ended February 22, that’s up 1,020 filings from the week before.