CNN
—
Employment growth rebounded in February as the US economy added 151,000 jobs, according to Bureau of Labor Statistics data released Friday.
The unemployment rate, however, edged up to 4.1% from 4% the month before. The labor force participation rate slipped as well.
Employment growth did pick up from January, a month where wildfires and weather likely muted gains: January’s payroll growth was revised down to 125,000 from 143,000.
On one hand, February’s jobs report marks another month of seemingly solid job gains and a continuation of a historic expansion of the labor market.
On the other, it provides a “a snapshot of a prior age, before the shift in federal government policies undermined confidence,” Samuel Tombs, chief US economist at Pantheon Macroeconomics, wrote in a note to investors on Friday.
“It’s either the calm before the calm, or the calm before the storm,” economist Sean Snaith, director of the University of Central Florida’s Institute for Economic Forecasting, wrote Friday.
In recent weeks, the Trump administration has made monumental policy shifts — including large-scale federal layoffs, funding cutbacks, a back-and-forth on tariffs and mass deportations — that have spilled into the broader economy, shaking business and consumer confidence, and resulting in several data points flashing warning signals.
However, the Department of Government Efficiency-driven employment cuts weren’t expected to make a big splash in February’s jobs report. That’s partly because of timing of the two surveys that feed in to the monthly employment snapshot and also due to the structure of employment separation agreements.
Still, Friday’s report gave a hint of what could come: The federal government posted a loss of 10,000 jobs for the month, with 3,500 of those losses coming from the US Postal Service.
That dampened employment gains in the broader public sector, which has been one of three key drivers (health care and leisure and hospitality being the others) of overall job growth with most of the credit going to strong gains in state and local governments.
In February, the overall government sector gained only 11,000 jobs, the lowest monthly total since April 2024. For the federal government, it was the worst month for job losses since June 2022.
“The economy is off to a slow start under the new president,” Chris Rupkey, chief economist at FwdBonds, wrote in commentary on Friday. “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.”
The health care sector, which has been the biggest driver of employment growth in recent years, continued to post strong gains, adding 52,000 jobs last month. However, the top job creator, sector that relies heavily on federal support (including funding and grants) is also under threat: President Donald Trump is reining in federal spending as he aims to extend his costly 2017 tax cuts.
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.
Employment growth picked up from January, which was revised lower to 125,000 from initial estimates of 143,000.
However, February’s gains came in below economists expectations for 160,000 jobs added.
This story is developing and will be updated.