Washington (United States) (AFP) – The United States unexpectedly lost jobs in February while unemployment edged up, government data showed Friday, piling pressure on President Donald Trump’s economic agenda as key midterm elections approach. The world’s biggest economy shed 92,000 jobs last month, in a sharp reversal from the job growth of 126,000 in January, said the Labor Department. The unemployment rate, meanwhile, crept up to 4.4 percent from 4.3 percent.
But White House economic adviser Kevin Hassett insisted Friday that the US economy remained “really strong,” telling CNBC that observers should consider the average job growth over a few months instead of focusing on monthly fluctuations. Fueling the overall plunge in February was a fall in health care employment due to strike activity, said the Labor Department. But data showed that other sectors were also struggling. Construction lost 11,000 jobs while manufacturing shed 12,000 roles, the report said. Transportation and warehousing slumped as well, while employment in leisure and hospitality tumbled by 27,000 jobs from January. On top of that, the department said, “employment in information and federal government continued to trend down.”
The trend, if it persists, is set to strain Trump’s attempts to ease growing worries about costs of living as the midterm elections approach. The broader economy may be holding up, but policymakers have pointed to a divergence in which wealthier households are doing well while medium- and lower-income families are struggling.
“Although February is a short month and numbers often come in lower, today’s report fell significantly short of projections,” said Ger Doyle, regional president for North America at ManpowerGroup. This “indicates that employers were far more restrained in their hiring plans as the month began,” Doyle added in a statement. He said the overall picture shows a “cautious” labor market where employers are adding roles where they must — but waiting for clearer economic signals before broadening their hiring plans.
Economists had widely expected a sharp slowdown in job growth this month, although not an outright decline. One month’s figures do not make a trend, observers say. Yet, the numbers are likely to fuel worries about the critical employment market, the strength of which previously helped to prop up consumers and household spending. Already, the Federal Reserve cut interest rates thrice last year as the jobs market weakened, before pausing in January to assess the situation. February’s figures could bolster the case for the central bank to resume lowering rates to shore up the economy.
Navy Federal Credit Union chief economist Heather Long added: “The unemployment rate ticked up for the wrong reasons. More people became unemployed in February.” She said: “This is backsliding and will raise alarm bells at the Federal Reserve.”
© 2024 AFP
