Yahoo Finance

Key Takeaways

• The U.S. economy likely added jobs at a healthy rate of 170,000 in February, according to forecasts, up from 143,000 in January.
  

• Mass layoffs and a hiring freeze of federal workers likely only had a small impact on job growth. The 3 million federal workers are a tiny fraction of the overall civilian labor force of 171 million.
  

• Tariffs imposed Tuesday by the Trump administration could push unemployment up in the future.
  

The U.S. job market likely chugged along at a healthy rate in February, with layoffs of federal workers not causing a big enough impact to dent the unemployment rate, forecasters expect.

A report Friday from the Bureau of Labor Statistics will likely show the U.S. economy added 170,000 jobs in February, up from 143,000 in January, according to a survey of economists by Dow Jones Newswires and The Wall Street Journal. The unemployment rate, according to the median forecast, likely stayed at 4%, not far from historic lows. The uptick may partly reflect a bounce-back after bad weather suppressed job growth in January, economists said.

A report in line with expectations would show the job market staying resilient even amid mass layoffs of federal workers, at least for the time being. While the layoffs and a hiring freeze by the administration of President Donald Trump could affect the economy by disrupting government services such as weather forecasting and air travel safety, the level of job losses is so far having only a small effect on the broader economy. Economists at Goldman Sachs estimated the layoffs reduced job growth in February by 10,000.

The entire federal labor force other than the military is only 3 million people, compared to the overall civilian workforce of 171 million. 

"The Trump administration's hiring freeze is likely to be a modest headwind in the near term," David Seif and other economists at Nomura, wrote in a commentary.

Tariff Trouble Ahead

Friday's report is a last look at the economy before the impact of the tariffs against Canada, Mexico and China that Trump put into action Tuesday. Economists expect the tariffs to drag down economic growth, stoke inflation, and cause layoffs that will become evident in future economic data. S&P Global estimated last month that Trump's tariffs would push the unemployment rate up by 0.2 percentage points.

A surge of joblessness would renew fears about the health of the job market. The unemployment rate ticked up last year, setting off some alarm bells about a potential recession that never came to pass. Economists at the time attributed the jump in unemployment to the arrival of immigrants and other job-seekers to the workforce, rather than any actual job losses. This time could be different.