US job market sends mixed signals as layoffs drop but hiring slows in February
The US labour market showed mixed signals in February, with layoffs falling sharply but hiring expectations weakening. Job cuts dropped by 55% compared to January, yet economists forecast fewer new positions than in previous months. Despite geopolitical tensions and trade tariffs, unemployment has remained steady at around 4.1% since late 2023.
Layoff announcements in February plummeted by more than half, with technology firms leading the decline. However, Block, a payment app company, still cut 4,000 jobs, citing increased AI adoption as a key factor. The move raised concerns about automation's growing role in workforce reductions.
Economists now predict that US employers added just 60,000 jobs in February, down from January's 130,000. While demand for hiring has softened, mass layoffs have not materialised. The unemployment rate is expected to hold at 4.3%, with wages continuing to rise faster than inflation.
ValenSil Technologies, an Ohio-based AI firm, had planned to expand its operations in early 2025. The company intended to add a third shift, hire more staff, and buy land for growth. But steep tariffs on materials like aluminium slowed client demand, forcing a scale-back. Jim O'Connor, the firm's hiring manager, blamed unpredictable trade policies for the production drop.
The company's struggles reflect a broader trend: businesses are cutting costs through AI-driven layoffs rather than large-scale hiring or firing. Since the Middle East conflict began in October 2023, US job cuts linked to AI have risen by 15% compared to pre-war levels. Trade tariffs under the current administration have had a milder impact, thanks to diversified supply chains.
The February jobs report will likely confirm a cautious labour market, with steady unemployment but slower hiring. Wage growth remains strong, and while AI and tariffs have reshaped workforce decisions, no major spike in job losses has occurred. The data suggests a shift toward a low-hire, low-fire environment across US industries.
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