Mixed Signals in February Job Report
Job growth in February was weaker than expected, with nonfarm payrolls increasing by 151,000, falling short of the 170,000 forecast, while the unemployment rate edged up to 4.1%. Federal employment declined by 10,000 as Elon Musk’s Department of Government Efficiency continued efforts to trim the workforce, though broader government payrolls still saw a slight increase. Wage growth remained steady at 0.3% for the month, though the labor force participation rate dropped to 62.4%, and a broader unemployment measure rose to 8%.
Despite market volatility driven by ongoing political and economic uncertainties, the labor market remained stable overall, with strong hiring in health care, finance, and transportation.
Fed Holds Steady as Powell Weighs Trump’s Policy Impact
Federal Reserve Chairman Jerome Powell emphasized a cautious approach to interest rates, stating that the central bank can wait to assess the economic impact of President Trump’s aggressive policy actions, including tariffs and regulatory changes. Despite market expectations of three rate cuts this year, Powell reiterated that policy is not on a preset course and that the Fed remains focused on long-term stability. He highlighted a strong labor market and inflation nearing the 2% target but acknowledged concerns stemming from fluctuating trade policies.
The February jobs report, showing 151,000 new jobs and a 4.1% unemployment rate, reinforced Powell’s stance that the labor market remains solid despite uncertainties.
Tariffs Spark Global Retaliation
President Trump’s shifting tariff policies on Canada and Mexico, including a one-month delay on key goods, have heightened concerns of a trade war. While officials claim the tariffs are linked to efforts to curb fentanyl imports, Canada and Mexico have pushed back. The move sent financial markets tumbling and raised concerns over inflation, economic uncertainty, and supply chain disruptions. Canadian Prime Minister Trudeau and Mexican President Sheinbaum vowed countermeasures, while China issued a strong warning of prolonged economic conflict.
As backlash mounts, Trump remains firm, arguing tariffs will ultimately benefit American workers and industries.
