Economists hoping for a better understanding of the U.S. job market are muting their expectations.
The Bureau of Labor Statistics is scheduled to release payroll numbers for February on Friday, and the monthly data is expected to show slow growth, due in part to large-scale strikes in the health care industry.
The US job market remains in turmoil. A surprisingly strong report in January gave optimism that hiring was on the rise, but the data also showed that U.S. job growth in 2025 will be much lower than previously thought.
“We do not expect the February jobs report to provide much new information about the state of the labor market,” Citigroup economists said.
The overall U.S. economy remains complex due to a variety of headwinds, including the government shutdown and the Trump administration’s lack of clarity on tariff policy.
Treasury Secretary Scott Bessent said Wednesday that the administration’s tariff plans are about to change again. Bessent said President Trump is expected to raise global tariffs to 15% this week from the recently introduced 10% after the Supreme Court struck down most previous tariffs.
February’s underwhelming report on economic growth – the Commerce Department showed output of goods and services (gross domestic product) grew at an annual rate of just 1.4% in the final quarter of 2025 – adds to the concerns.
And while the unemployment rate remains fairly low (it hit 4.3% last month), employment growth is sluggish, with experts using words like “frozen” and “stagnant” to describe the labor market.
It is expected that there will be more similar information in February’s employment statistics. The consensus forecast is that the U.S. added 50,000 jobs last month.
Analysts at Bank of America expect employment to rise by 35,000, in part due to the 31,000 health care workers who went on strike at Kaiser Permanente. The strike has since ended but could still impact overall numbers.
There are also questions about whether January’s strong results were due in part to good weather and how the Bureau of Labor Statistics modeled its data. JPMorgan’s chief U.S. economist Michael Feroli said Friday’s report could also show a downward revision to last month’s numbers.
Economists at Citigroup also tempered expectations, writing in a recent note: “We continue to suspect that the recent strong employment report reflects a familiar seasonal pattern and not a true stabilization or improvement in worker demand.”
If jobless claims don’t increase in the coming weeks and the jobs report shows no further slowdown through April or May, “that would be a more meaningful sign that employment is actually starting to improve again,” they said.
But this is not Citi’s basic case. “Consistent with the familiar pattern, the unemployment rate is expected to rise to around 4.7% in the second half of this year,” they wrote.
Friday’s jobs report will also come as consumers face renewed economic uncertainty.
On Saturday, the United States and Israel launched attacks on Iran, leading to severe shipping disruptions in the Strait of Hormuz, through which more than 20% of the world’s oil supplies must pass to reach global markets.
Since then, U.S. oil prices have risen 20% and the retail price of gasoline for consumers has increased by more than 30 cents, sparking new fears that inflation could return.
“The rise in oil prices is starting to bring back memories of 2022, when oil prices exceeded $100 a barrel as inflation accelerated rapidly,” said Carsten Brzeski, global head of macro at ING Research.
“The global economy is once again at a critical juncture, one that will not only have significant short-term impacts, but also has the potential to further exacerbate ongoing tectonic shifts in the broader geopolitical landscape,” he said.
ING predicts that U.S. inflation will “return to above 3% this year, putting pressure on consumer purchasing power.”
