The US labor market is expected to hold steady in February, with nonfarm payrolls forecast to increase 160,000 jobs, according to a Reuters survey of economists. The unemployment rate is expected to remain unchanged at 4.0%, and average hourly earnings are likely to rise 0.3%.
However, growing uncertainty over trade policy and deep federal government spending cuts could erode the labor market’s resilience in the months ahead. The Trump administration’s fluid trade policy has made it difficult for businesses to plan ahead, and economists warn that this is a major concern.
The employment report will also show the impact of winter storms and fires in California on payroll gains. Some economists expect lagged effects of the destruction from the Los Angeles fires, which could limit the anticipated payrolls bounce.
A new trade war has triggered by President Trump has raised concerns about the economy’s stability. However, labor market stability may provide the Federal Reserve with more time to keep interest rates unchanged as policymakers monitor the economic impact of tariffs and an immigration crackdown.
Despite the uncertainty, some economists believe that the US economy has shown itself to be surprisingly resilient during the pandemic recovery cycle.
Source: https://www.reuters.com/markets/us/us-labor-market-seen-holding-steady-ahead-tariffs-turbulence-2025-03-07