February jobs report is the calm before the storm: Full impact of Trump administration’s federal layoffs and chaotic policy shifts still to come

Below, EPI economists offer their insights on the jobs report released this morning, which showed 151,000 jobs added in February. 

From EPI senior economist, Elise Gould:

Read the full thread here.

You might expect a negative #NumbersDay in this jobs report because of reported layoffs in and out of the government, but, it hasn’t shown up in the data yet. Unfortunately, this is the calm before the storm as trouble is clearly brewing and the pain will be felt across the economy in coming months.

— Elise Gould (@elisegould.bsky.social) March 7, 2025 at 7:33 AM

Jobs #NumbersDay highlights:
– Employment rose by 151,000 in February, just shy of the 168,000 average over the prior twelve months
– Nominal wage growth increased 4.0% over the year
– The unemployment rate ticked up to 4.1%
– The labor force participation rate fell 0.2 percentage points

— Elise Gould (@elisegould.bsky.social) March 7, 2025 at 7:47 AM

All eyes are on the latest #NumbersDay data to see the fingerprints of the recent federal layoffs. It’s too soon to see much, but here are recent trends in federal jobs for perspective. Ignore the large swings in Census taker employment. In February, we see an initial loss of 10,000 federal jobs.

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— Elise Gould (@elisegould.bsky.social) March 7, 2025 at 8:14 AM

As with much of the last few years, job growth in February was strongest in health care and social assistance. Proposed cuts to Medicaid and other social programs could seriously hamper not only employment in these areas but also the valuable services they provide.

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— Elise Gould (@elisegould.bsky.social) March 7, 2025 at 8:21 AM

Nominal wage growth continues to hold steady, rising 4.0% over the year. After falling steadily since its peak in June 2022, inflation has hovered around 3% for 20 months. As a result, average real wages have been rising. These gains could all be lost with the proposed tariffs and deportations.

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— Elise Gould (@elisegould.bsky.social) March 7, 2025 at 8:41 AM

From EPI president, Heidi Shierholz: 

Read the full thread here. 

We will start seeing the real impact of federal worker layoffs next month—not only reducing overall employment but undermining essential public services, making communities less safe, less healthy, and less economically stable. 5/

— Heidi Shierholz (@hshierholz.bsky.social) March 7, 2025 at 7:58 AM

And, we will likely start seeing job losses not just among federal workers, but from private sector workers who work at private sector firms who receive federal contracts (note: this is a much bigger group than federal workers). 6/

— Heidi Shierholz (@hshierholz.bsky.social) March 7, 2025 at 7:58 AM

Further, many other data sources are now starting to flash yellow/red. Stock markets are down, treasuries are down, consumer sentiment is down, inflation expectations are up, and measures of economic policy uncertainty are through the roof. 7/

— Heidi Shierholz (@hshierholz.bsky.social) March 7, 2025 at 7:58 AM

We will likely start to see private sector losses due to the chaos and instability the administration is sowing, as firms may hold off on investments and hiring, given the uncertainty. 8/

— Heidi Shierholz (@hshierholz.bsky.social) March 7, 2025 at 7:58 AM

A pull back in business investment triggered by policy uncertainty, combined with draconian budget cuts, could create a drag on demand that is too big to for the fed to handle, tipping us into recession later this year. 9/

— Heidi Shierholz (@hshierholz.bsky.social) March 7, 2025 at 7:58 AM

Unlike with the pandemic recession, if we have an economic crisis right now, it will have been entirely this administration’s doing. They will have taken an historically strong economy and tanked it with chaotic mismanagement and cruelty. 10/

— Heidi Shierholz (@hshierholz.bsky.social) March 7, 2025 at 7:58 AM

From EPI economist, Hilary Wething:

A key thing to think about when interpreting jobs numbers is the timing of Trump policies. Next month, we are sure to see the impact of federal layoffs in the economy, but there are other, slower moving but certainly harmful policy trajectories to watch out for. 1/

— Hilary Wething (@hilwething.bsky.social) March 7, 2025 at 8:25 AM

Immigration, tariffs, and Medicaid cuts all will have ripple effects throughout the entire economy. For more about Medicaid’s impact specifically, check out a new report I wrote with @joshbivens-econ.bsky.social & @moniquemorrissey.bsky.social www.epi.org/publication/…

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— Hilary Wething (@hilwething.bsky.social) March 7, 2025 at 8:25 AM