February Jobs Report: Steady Growth, But Policy Risks Threaten Economic Stability
Dr. Bernard E. Anderson, Ph D
Whitney M. Young Jr. Professor Emeritus, The Wharton School, University of Pennsylvania
Senior Economic Advisor, National Urban League
The U.S. economy added 151,000 jobs in February, reflecting a resilient labor market, though growth has moderated.
Employment among white workers declined several thousand while white unemployment edged up. In comparison, Black employment rose slightly while there was little change in Black unemployment. As a result, the Black/White unemployment gap declined to an unprecedented level of 1.57, down notably from the earlier 2:1 ratio, but still reflective of systemic disparities in the workforce.
The numbers in the February jobs report are close to expectations. They reflect modest consumer spending and business investment with inflation pegged at 2.5 percent. The near-term economic outlook is fraught with uncertainty given the threat of tariffs on major trading partners. But the change in tax policy would have a more significant impact than tariffs on spending, investment, and economic growth.
Job gains were strongest in health care, financial activities, and transportation. At the same time, federal government employment shrank by 10,000 jobs, continuing a trend that could weaken public services and diversity in government employment.
Despite steady job growth, signs of uncertainty are emerging. Inflation has cooled from 7.1% two years ago to 2.4% in January, aided by the Federal Reserve's 100-basis point rate cut in 2024, yet risks remain. The Trump administration has proposed tariffs on trading partners and mass deportations of undocumented workers, policies that could destabilize the labor market and increase costs for businesses and consumers. Tariffs would raise prices on imported goods and spark trade retaliation that could weaken exports. At the same time, deportations would shrink the labor force in key industries such as agriculture, food production, and construction, leading to supply chain disruptions and higher consumer prices.
Wages continued to rise, with average hourly earnings increasing by 0.3% in February and 4.0% over the past year, but these gains have not been evenly distributed across racial and economic groups. The employment-population ratio dipped slightly to 59.9%, reflecting small shifts in labor force participation. While consumer spending has remained stable, its trajectory will be shaped by fiscal and trade policies in the months ahead.
The economy is expected to see modest growth through midyear, so the stakes are high. Washington's policy decisions will determine whether the labor market maintains its strength or faces unnecessary disruption. The National Urban League remains committed to advocating for economic policies that promote equitable job creation, wage growth, and financial security for Black workers and families nationwide.