The US labour market demonstrated surprising resilience. The US employers added 228,000 jobs last month, nearly double the expected 130,000. This growth occurred despite President Donald Trump’s trade tariffs, federal worker purges and immigrant deportations. However, the country’s unemployment rate was slightly increased to 4.2%. Moreover, the hiring numbers in February stood at 117,000.
Furthermore, workers’ average hourly earnings increased by 0.3% from February. On a year-over-year basis, hourly pay rose by 3.8%, which is slightly lower than the forecasted 4%. This growth rate is approaching the 3.5% annual increase considered consistent with the Federal Reserve’s annual inflation target of 2%.
The US job market saw significant gains in healthcare, which added 54,000 jobs, followed by restaurants and bars, which added nearly 30,000 new jobs. However, the federal government lost 4,000 jobs, potentially because of the Elon Musk’s workforce restructuring move.
Notably, US President Donald Trump’s “Liberation Day” trade tariffs and immigration policies pose significant threats to the US economy. The sweeping tariffs could lead to higher prices, disrupted commerce and retaliatory tariffs from trading partners.
Moreover, the US President’s move to deport millions of undocumented immigrants working in the US could exacerbate labour shortages. This will potentially force companies to either cut back or increase wages and prices, potentially fuelling inflation.
US Employment Data: Better From Past?
The US job market had peaked in 2021-2023. The country’s employers added 1.51 lakh jobs in February and 1.25 lakh jobs in January. However, this is a decline from the monthly average of 1.68 lakh in the previous year.
The monthly average in 2023 stood at 2.16 lakh and in 2022, it was 3.80 lakh. In 2021, the monthly job average in the US was at record high and touched 6.03 lakh. Notably, this was the base effect of the COVID-19 pandemic year.
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