Daijiworld Media Network - Washington
Washington, Mar 6: The United States economy unexpectedly shed jobs in February, with the unemployment rate rising to 4.4 per cent, signalling possible weakening in the labour market and putting the Federal Reserve in a difficult position amid rising oil prices.
According to the US Labor Department’s closely watched employment report released on Friday, nonfarm payrolls fell by 92,000 jobs last month, marking the sixth monthly decline since January 2025 and the second-largest drop during the period.
The Bureau of Labor Statistics said the fall came after a downwardly revised increase of 126,000 jobs in January. Economists had forecast payrolls to rise by 59,000 jobs after an earlier estimate of 130,000 for January.
Analysts said uncertainty linked to President Donald Trump’s sweeping tariffs had contributed to the labour market slowdown. Although the US Supreme Court struck down the import duties, Trump later imposed a 10 per cent global tariff and announced plans to raise it to 15 per cent.
Economists also warned that the ongoing war in the Middle East could further affect the labour market by pushing oil prices higher and increasing stock market volatility.
“Today’s numbers may have put the Fed between a rock and a hard place,” said Ellen Zentner, chief economic strategist at Morgan Stanley Wealth Management. She noted that while a weakening labour market could justify interest rate cuts, rising oil prices could also trigger another wave of inflation.
The US Federal Reserve is scheduled to hold its next policy meeting on March 17-18, and economists expect the central bank to maintain its benchmark interest rate in the range of 3.50 per cent to 3.75 per cent. However, the likelihood of a rate cut in June has increased.
Job losses were reported across several sectors. Healthcare employment dropped by 28,000 positions after a strong gain in January, partly due to a strike involving about 31,000 healthcare workers at Kaiser Permanente in California and Hawaii.
Employment in the information sector fell by 11,000 jobs, while the federal government cut another 10,000 positions. Since October 2024, federal government employment has declined by about 330,000 jobs as part of efforts by the White House to reduce its workforce.
The transportation and warehousing sector lost 11,000 jobs, while construction employment also declined by the same number, likely due to adverse weather conditions.
Despite the job losses, economists noted that the unemployment rate remains relatively low by historical standards. However, they cautioned that concern could rise if the rate moves beyond 4.5 per cent in the coming months.