US Hiring Set to Remain Healthy in February, Despite Pending Policy Impacts

January’s Job Market Performance

The U.S. job market in January 2025 showed steady growth, though job additions fell short of economist expectations. According to the U.S. Bureau of Labor Statistics, employers added 143,000 jobs, lower than the forecasted 170,000. However, the unemployment rate dipped to 4%, continuing an impressive 49-month streak of employment expansion—making it the second-longest on record.

February’s Job Market Projections

Looking ahead, February is expected to see an uptick in hiring, aligning with economist forecasts. Projections estimate 170,000 new jobs will be added, bouncing back from January’s lower numbers. Several factors contribute to this expectation, including:

The unemployment rate is expected to remain stable at 4%, close to historic lows, reinforcing a strong labor market.

Key Influences on the Job Market

Multiple external factors are influencing the labor market’s trajectory in February, some with immediate effects and others poised to impact future job growth.

Federal Job Cuts

The Department of Government Efficiency announced plans to cut 10,000 federal jobs. While this may seem like a broad shift, its impact on overall employment figures will be minimal as the federal workforce represents a small fraction of the 171 million civilian labor force.

Trade Policies and Potential Impacts

New trade tariffs on goods from Mexico, Canada, and China may not significantly influence February’s job numbers, but they could have far-reaching effects in the coming months. These tariffs may:

Mild Weather Boosts Hiring

Warmer-than-usual temperatures are expected to benefit construction and other outdoor industries, likely bolstering hiring figures for February. This trend provides temporary relief to job growth in weather-sensitive sectors.

Industry-Specific Trends

Different industries within the job market continue to experience varied performance, with some sectors slowing down while others see renewed growth.

Construction Industry Struggles

The construction sector remains under pressure, adding just 4,000 jobs in January. The industry faces challenges due to:

Manufacturing Experiences a Shift

After 26 months of contraction, the manufacturing industry finally saw minor expansion in January, indicated by a manufacturing PMI increase to 50.9%. However, employment remains weak, with manufacturing jobs down by 105,000 year-over-year.

AI Hiring and Remote Work Trends

AI-related job postings continue to surge beyond the tech industry. Sectors such as marketing and advertising have seen a remarkable 237% increase in AI-related job listings.

Meanwhile, remote work remains a stable part of the job market, with approximately 5.8% of new postings offering flexible or fully remote work options. Businesses are increasingly integrating hybrid work setups, further shaping future employment trends.

Potential Market Reactions and Future Outlook

The February jobs report could have a significant impact on financial markets, depending on the actual figures compared to expectations.

Stronger-Than-Expected Job Growth

If hiring surpasses projections, it could trigger: