Trump’s Trade Wars Cloud US Job Outlook

The American job market has remained remarkably resilient, but it has cooled from the red-hot hiring of 2021-2023. Employers added a decent average of 166,000 jobs a month last year, down from 216,000 in 2023, 380,000 in 2022 and a record 603,000 in 2021

The US labour market likely kept on churning out jobs last month, economists say, but the outlook is cloudy and getting cloudier as the Trump administration wages trade wars, purges federal employees and seeks to deport millions of immigrants.

When the Labour Department releases February jobs, they're expected to show that employers added 160,000 jobs. That's far from spectacular but it's solid, and it's up from 143,000 in January. The unemployment rate is forecast to stay at a low 4 per cent, according to economists surveyed by the data firm FactSet.

“Despite rising concerns about the health of the economy, momentum remains positive,' Lydia Boussour, senior economist at the tax and consulting firm EY, wrote in a commentary. Billionaire Elon Musk's purge of federal workers is not expected to have much impact on the February jobs numbers. The Labour Department conducted its survey of employers too early in the month for the Department of Government Efficiency layoffs to show up. “We expect to see a more visible dent to federal payrolls in March and subsequent months,' Boussour said. Diane Swonk, chief economist at accounting giant KPMG, expects that hiring at leisure and hospitality companies - which include hotels, restaurants, theaters - bounced back last month after falling during January's wildfires in Los Angeles.

“The key issue will be who shows up for the jobs,' she wrote in a commentary. Swonk noted that the Trump administration has revoked asylum for nearly 1 million Venezuelan and Haitian refugees, “which may keep them from showing up to work or filling vacancies that native-born workers tend to shun."