The Labor Department reported Friday that employers cut 92,000 positions in February, the steepest one-month drop since last fall's government shutdown and a stark reversal from January's gain of 126,000 jobs. Nearly every corner of the economy retrenched, including healthcare—normally the labor market's safety net—where strikes and cost cuts erased thousands of posts. The unemployment rate ticked up to 4.4 percent.
Healthcare lost 12,000 positions, federal agencies shed 10,000, and state and local governments trimmed another 9,000. Since October, federal employment alone has dropped by 330,000, an 11 percent decline. December and January weren't as rosy as first advertised either; the department revised combined gains in those months down by 34,000.
The report landed like a brick in both markets and campaign headquarters. Democrats pounced. "These numbers are a blaring alarm that President Trump's economy is deteriorating rapidly," Senate Minority Leader Chuck Schumer said. Senator Elizabeth Warren accused the White House of "tanking the job market." Kevin Hassett, Trump's top economic adviser, countered on CNBC that the economy remains "really strong" and urged observers to look at the three-month average rather than "one-month wiggles."
The data handcuff the Federal Reserve. Normally, a weakening labor market would push the central bank to cut interest rates, making mortgages and business loans cheaper. But oil prices have jumped 14 percent since January on Middle-East tensions, reviving inflation fears. "Today's numbers may have put the Fed between a rock and a hard place," said Ellen Zentner, chief economic strategist at Morgan Stanley Wealth Management. Traders now see only a 40 percent chance of a rate cut before summer, down from 70 percent a week ago.
If you're job hunting, expect more competition. Online job-board Indeed reported that applications per opening rose 9 percent in the past month. Workers already employed may find bosses less willing to approve raises when headlines scream of layoffs. Pantheon Macroeconomics chief U.S. economist Samuel Tombs put it bluntly: "The idea the labor market has turned a corner implodes with this report." For the 240,000 people who lost paychecks last month, the next rent payment depends on how quickly hiring revives—something neither political party is promising to fix before Election Day.
Your odds of getting a raise just got slimmer. The Labor Department reported Friday that employers cut 92,000 positions in February, the steepest one-month drop since last fall’s government shutdown and a stark reversal from January’s gain of 126,000 jobs. Nearly every corner of the economy retrenched, including healthcare—normally the labor market’s safety net—where strikes and cost cuts erased thousands of posts. The unemployment rate ticked up to 4.4 percent, meaning 7.4 million people are now officially looking for work, the most since mid-2023.
Healthcare lost 12,000 positions, federal agencies shed 10,000, and state and local governments trimmed another 9,000. Retail, manufacturing, and temporary-help services each posted four-figure declines. Since October, federal employment alone has plunged by 330,000—an 11 percent purge that outstrips any 12-month stretch since the post-war drawdown of the 1950s. December and January weren’t as rosy as first advertised either; the department revised combined gains in those months down by 34,000.
The report landed like a brick in both markets and campaign headquarters. The S&P 500 dropped 1.1 percent on the open, while two-year Treasury yields slid as traders priced in a higher chance of recession. Democrats pounced. “These numbers are a blaring alarm that President Trump’s economy is deteriorating rapidly,” Senate Minority Leader Chuck Schumer said. Senator Elizabeth Warren accused the White House of “tanking the job market.” Kevin Hassett, Trump’s top economic adviser, countered on CNBC that the economy remains “really strong” and urged voters to look at the three-month average rather than “one-month wiggles.”
The data handcuff the Federal Reserve. Normally, a weakening labor market would push the central bank to cut interest rates, making mortgages and business loans cheaper. But oil prices have jumped 14 percent since January on Middle-East tensions, reviving inflation fears. “Today’s numbers may have put the Fed between a rock and a hard place,” said Ellen Zentner, chief economic strategist at Morgan Stanley Wealth Management. Traders now see only a 40 percent chance of a rate cut before summer, down from 70 percent a week ago.
If you’re job hunting, expect more competition. Online job-board Indeed reported that applications per opening rose 9 percent in the past month. Workers already employed may find bosses less willing to approve raises when headlines scream of layoffs. Pantheon Macroeconomics chief U.S. economist Samuel Tombs put it bluntly: “The idea the labor market has turned a corner implodes with this report.” For the 240,000 people who lost paychecks last month, the next rent payment depends on how quickly hiring revives—something neither political party is promising to fix before Election Day.
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