US job market grows despite mass federal layoffs and Trump tariffs
Job growth continues despite federal layoffs (Photo: Getty Images)
The US labor market showed resilience in February, adding 151,000 jobs even as fears of mass government layoffs and uncertainty around Trump’s tariff policies continued to loom over the economy, according to The Guardian.
While the economy added jobs overall, the federal workforce took a hit, losing 10,000 positions in February. However, private-sector hiring in healthcare, transportation, financial services, and social assistance helped offset these losses. Economists had projected a higher growth of 170,000 jobs, but the actual numbers suggest a slowing pace.
“The economy started the year soft but is not plummeting towards a recession,” said Thomas Ryan, North American economist at Capital Economics. He warned that March’s job report might show a stronger impact from government layoffs, as recent mass firings in federal agencies have yet to be fully reflected in official data.
Other indicators also hint at a cooling labor market - ADP reported just 77,000 new hires in February, far below expectations, while Challenger, Gray & Christmas recorded over 172,000 announced job cuts across sectors, the highest since mid-2020.
Healthcare jobs on the rise amid government cuts (Photo: Getty Images)
Uncertainty over Trump’s policies weighs on economy
The full impact of Trump’s economic policies remains unclear, especially his decision to impose 25% tariffs on Canada and Mexico, which sent shockwaves through Wall Street and consumer confidence.
His administration’s Department of Government Efficiency (Doge), led by Elon Musk, has triggered widespread job cuts, particularly through buyout programs and terminations of probationary employees. However, unions are pushing back, and Trump recently announced a delay in some of the proposed tariffs.
Federal Reserve officials, set to meet on March 18-19, are closely watching labor market trends and economic volatility before deciding on interest rate adjustments. Inflation remains at 3%, above the Fed’s 2% target, making future rate cuts uncertain.
Fed Chair Jerome Powell has stated that policymakers are closely monitoring the situation, acknowledging that “tariffs, immigration, and fiscal policies add new layers of uncertainty.”
As Trump pushes for more aggressive government downsizing, reports indicate that Donald Trump plans mass firings of healthcare workers.
At the same time, resistance within the federal workforce is growing, as US federal officials do not support Trump’s request for dismissal.
