US job market stalls, unemployment rate rises ahead of Fed decision | Business and financial news

The health sector was the worst hit while tariff bearing sectors remained stagnant

The United States economy unexpectedly lost 92,000 jobs in February and the unemployment rate rose to 4.4 percent, marking the sixth contraction of the US job market under the Trump administration.

The US Labor Department released its February jobs report on Friday.

Economists forecast marginal gains, with a poll of economists by Reuters at 59,000, Bloomberg News at 55,000 and Dow Jones at 50,000.

The unemployment rate rose slightly by 0.1 percent from 4.3 percent in January, with more than 25 unemployed workers without work for more than 27 weeks.

Worst hit zones

February’s decline follows downwardly revised gains in January, when the US economy added 126,000 jobs.

The healthcare sector was hit hardest, losing 28,000 jobs in February. Cuts to the federal government continued with 10,000 fewer jobs across the industry in February. However, it was underscored by strikes in California, Hawaii and New York.

The cuts to the healthcare industry come despite ADP’s private payrolls report showing education and health services added 58,000 jobs. The ADP private payrolls report showed a total of 63,000 jobs added for the month.

Tariff-exposed sectors were hit even harder, including transport and warehousing, which lost 11,000 for the month. The industry has lost 157,000 jobs since this time last year.

Industries including construction, wholesale trade, retail trade, as well as leisure and hospitality were unchanged from this time last month. Although the import tariffs were struck down by the US Supreme Court in February, Trump imposed a global tariff of 10 percent and said it would soon rise to 15 percent.

Pressure on the Fed

The US central bank holds its next policy meeting on March 17-18, and economists still expect the Fed to keep its benchmark overnight interest rate in the 3.50 percent-3.75 percent range. However, the odds of a June rate cut increased with Friday’s data.

The dollar was little changed against a basket of currencies. US Treasury yields fell.

“Today’s numbers may have put the Fed between a rock and a hard place,” Ellen Zentner, chief economic strategist at Morgan Stanley Wealth Management, told Reuters.

“Significant weakness in the labor market supports rate cuts, but given the risk of higher oil prices triggering another inflationary surge, the Fed may be forced to stay on the sidelines.”

The White House did not respond to Al Jazeera’s request for comment.

US markets are taking a hit on the heels of a stagnant labor market. In afternoon trading, the Nasdaq was down 0.8 percent, the S&P 500 was down 1 percent and the Dow Jones Industrial Average was down 1.1 percent.