In February, the U.S. labor market is expected to have added 160,000 jobs, a solid but not spectacular number according to economists. The unemployment rate is predicted to remain at 4%. Despite concerns about the economy, momentum remains positive. The purge of federal workers by Elon Musk is not expected to heavily impact February job numbers, but future months may see a more significant dent in federal payrolls. Chief economist Diane Swonk anticipates a rebound in hiring at leisure and hospitality companies following a decline due to January wildfires in Los Angeles. The job market has been resilient, though not as hot as in previous years, with hiring averaging 166,000 jobs per month in 2024 compared to higher numbers in earlier years.

The economy has withstood high interest rates that were expected to lead to a recession, thanks to strong consumer spending, productivity gains, and an influx of immigrants. Inflation peaked in June 2022, prompting the Federal Reserve to raise interest rates before subsequently cutting them in 2024. Economists expect a slight rise in workers’ average hourly earnings last month, which may not be enough for the Fed to cut rates at its upcoming meeting. The economic outlook is becoming more uncertain as the Trump administration imposes or threatens to impose tariffs on imported goods, potentially leading to business adjustments, lower hiring, and restrained consumer spending amid higher inflation.