The US job market stayed resilient in February, although there were increasing concerns of the effects of US president Donald Trump’s new policies regarding the federal workforce and global tariffs.
US employers added a 151,000 jobs last month, though unemployment rose slightly to 4.1%. This was an increase from a revised 125,000 in January. However, the figure missed expectations with 160,000 new jobs expected.
The number of Americans without jobs increased by 203,000 in February.
More jobs were added to the finance, healthcare, warehousing and transport sectors, while 10,000 jobs were slashed in the federal government, which was the highest number since June 2022.
However, the outlook is still uncertain as US president Donald Trump continues to threaten tariffs on the EU, after recently imposing 25% tariffs on both Mexico and Canada, and increasing tariffs on China to 20%.
Trump has also revealed plans to restructure the federal workforce, as well as deport millions of immigrants, although experts don’t expect these federal job cuts to have too much of an impact until the March non-farm payroll report.
The US job market has been considerably robust in the last year, despite ongoing high interest rates and sticky-high inflation.
“This is as boring as non-farms gets, but no news is good news for the dollar after a bruising week. While education and healthcare provided the bulk of the hires once again rather than the cyclical industries investors really want to see, this is a solid figure. Nothing to see here, and no reason to press ahead with the US slowdown narrative based on this report,” said Kyle Chapman, FX markets analyst at Ballinger Group.
He continued: “But the worst is probably yet to come. A cocktail of shocks is being thrown at the US economy: the end of Biden-era stimulus, historic policy uncertainty curtailing hiring and investment decisions, trade wars, and DOGE’s assault on the federal government and its contractors.”
Chapman highlighted that February was too soon to see the full effect of these shocks, but that they are likely to be felt more in the coming months.
“The only way out is for Trump to give us some certainty or for confidence to rebound, and that is not something I see coming any time soon,” he said.
Chapman also pointed out that US interest rates will likely be cut by 75bps this year.
