Policy uncertainty and fierce job cuts in Washington have threatened the US economy with moorers and analysts, providing the latest photos of its effectiveness so far in a new employment dataset.
The Bureau of Labor Statistics is scheduled to release its February monthly employment report at 8:30am on Friday. Analysts expect to see around 170,000 new payrolls added last month from the profits of 143,000 jobs in January. The unemployment rate is expected to remain stable at a historically low level of 4%.
Less than two months after President Donald Trump’s new administration took office, he promised to launch a storm cloud for the solid economy he inherited and overhaul it to address the widespread frustration of voters.
In recent weeks, consumer trust has been in a recession as households change their focus from spending to saving. Meanwhile, the combination of Trump’s still evolving tariff agenda and the massive job cuts sought by his billionaire adviser Elon Musk’s Department of Government Efficiency initiative has led to a rise in the view of higher unemployment and higher priced twins.
The Bureau of Labor Statistics may not yet cover the full range of those forces, as the Bureau of Labor Statistics’ February report’s investigation period covers the first two weeks of the month. That’s one reason why Wells Fargo senior economist Sarah House expects the numbers to look rather robust along with the rough weather setbacks in January when he stopped hiring earlier this year. But the photo could soon turn sour, she warned.
“As we move this year, there are likely to be some headwinds,” House said. “It’s not just the tariffs we’re claiming, but also the slowest immigration. It will affect the growth of the workforce, and we are now making quite an active effort to cut government spending.”
Two informal reports were shown to show the job market during the Department of Labor Statistics figures on Friday. Since the depth of the pandemic in mid-February, February’s job cut announcements have reached their highest monthly level.
On Wednesday, private sector pay processor ADP tallyed 77,000 net profit in February, much less than its forecast of 148,000. The decline included recent technology layoffs and losses in education and health services in the information services sector. This is an employment that often relies on federal grants, ADP chief economist Nella Richardson said in a call with a reporter Wednesday.
“And here we may see some uncertainty as the policy is digested and evaluated,” she said, referring to cuts in the federal workforce. “We don’t know exactly what this represents, but we’re seeing a measurable decline in employment in key sectors of the economy.”
With increasing uncertainty, large retailers are warning that they are likely to ask customers to pay some of the increased costs from Trump’s tariffs. A few days before the White House offered temporary deductions for some obligations announced, it raised Target and Best Buy alarms about that possibility this week. Walmart also warns that it will not be completely “immunized” from new import taxes on top American trading partners.
Richardson said in a report Friday morning that retailers will become “a sector that monitors.” She added that her company’s February tally reflects the post-Holiday “slump” in consumer spending, and that the Bureau of Labor Statistics data should provide more insight into where retail employment is heading.
While some Wall Street companies estimate that the potential unemployment triggered by Doge alone could total 500,000 people, Barclays analysts have recently argued that the macroeconomic impacts from many unemployment are relatively constrained. Federal payroll accounts for just 1.5% of all jobs, and even the knock-on effect on government contractors doesn’t dramatically change labour market photos, bank researchers said.