What you should look for in Friday’s employment report

US Labor Market Faces Uncertainty Amid Shifting Economic Landscape

A job seeker waits to meet with a recruiter at the WorkSource North Seattle Career Fair in Seattle, February 10, 2026. - David Ryder/Bloomberg/Getty Images

Concerns about the economy, fueled by President Donald Trump’s notable trade initiatives, have prompted many small businesses to reduce staff, postpone growth plans, or cut back on output.

ValenSil Technologies, an aerosol filling company based in Avon, Ohio, had been experiencing rapid growth heading into 2025. The company expanded its operations, introduced a second shift, and nearly tripled its workforce to 47 employees.

Business was thriving, and ValenSil was preparing to launch a third shift, hire an additional eight to fifteen workers, and even acquire land for further expansion.

However, these ambitions were quickly shelved. The company eliminated its second shift and reduced staff numbers—not through layoffs, but by not replacing departing employees.

Jim O’Connor, who oversees purchasing and hiring at ValenSil, attributed the slowdown to significant tariffs on materials like aluminum and the unpredictable manner in which these policies have been enforced. This uncertainty has dampened demand from the company’s clients.

Empty aerosol cans at ValenSil Technologies' facility in Avon, Ohio - Courtesy Jim O’Connor

“We experienced a considerable slowdown and were hoping for conditions to stabilize,” O’Connor explained.

He remains convinced that demand still exists, but clients are hesitant to make decisions due to the unpredictable business environment.

ValenSil’s experience reflects a broader trend in the US job market, which has shifted toward a low-hiring, low-firing climate—a trend likely to be highlighted in the upcoming February employment report.

Any hopes for stability have been quickly dashed. In just the past three weeks, the economy has faced a major trade policy ruling from the US Supreme Court, a large-scale layoff related to AI, and most recently, the outbreak of a new conflict in the Middle East.

“These are three very different global events, but they all boil down to one thing: uncertainty,” said Nela Richardson, chief economist at ADP. “This is an unpredictable global environment, and we’ve seen how that impacts hiring decisions.”

Reviewing Recent Trends and Looking Ahead

The Bureau of Labor Statistics is set to release Friday’s jobs report at 8:30 a.m. ET, offering a crucial look at the state of the US labor market before these recent shocks.

Expectations are that hiring remains subdued compared to previous years, but mass layoffs are also not widespread. Alongside weaker hiring demand, the labor pool has also shrunk, partly due to long-term demographic changes as Baby Boomers retire and immigration slows.

What Economists Expect from the Latest Jobs Data

Analysts predict that US employers added around 60,000 jobs last month, a significant slowdown from January’s estimated 130,000 new positions. January’s stronger numbers were likely influenced by unique factors, such as less seasonal hiring during the holidays (resulting in fewer post-holiday layoffs) and unusually warm weather that benefited sectors like construction.

A construction worker welds a beam at a building site in Boston, February 26, 2026. - Charles Krupa/AP

February’s unemployment rate is projected to hold steady at 4.3%, with wage increases continuing to outpace inflation.

ADP’s latest report showed a rise in private-sector hiring, especially in healthcare, and stable wages for those staying in their jobs. Weekly claims for unemployment benefits have also remained low.

Layoff announcements decreased from January levels. According to Challenger, Gray & Christmas, US employers announced 48,307 job cuts last month—a 55% drop from the previous month.

“The decline in February provides a welcome break from the high number of job cuts seen at the start of the year,” said Andy Challenger, chief revenue officer at the outplacement firm.

However, Challenger warned that this trend could reverse.

Technology companies accounted for the largest share of layoffs, with 11,039 cuts, including 4,000 at payment platform Block, where CEO Jack Dorsey cited the growing influence of AI.

“With the US now involved in a widening conflict in Iran, the end of the first quarter could see more layoffs as companies brace for uncertainty and rising costs,” Challenger added.

Block’s decision has intensified worries about AI’s impact on an already fragile job market, though other factors are also at play, Challenger noted.

“The tech sector is facing multiple challenges. While AI is a major factor, there are also concerns about global regulations, a slowdown in digital advertising due to tariffs and economic instability, and increased costs for both labor and financing. These pressures are forcing companies to make tough choices,” he said.

Important Factors Affecting the Data

January’s employment reports are often particularly complex due to post-holiday workforce changes and annual data adjustments.

February’s numbers are usually clearer, but this month’s report is expected to include some notable anomalies.

• Strikes: Payroll data for February will be affected by the roughly 31,000 healthcare workers who were on strike during the survey period. Since the strike ended on February 23, these “lost” jobs will reappear as gains in March’s report.

Nurses strike outside a New York City hospital on January 12, 2026. Nearly 15,000 nurses participated. - Michael M. Santiago/Getty Images

• Weather: Harsh winter storms likely slowed hiring in industries sensitive to weather, such as construction and hospitality.
• Revisions: February’s report will also feature annual updates that were delayed due to last fall’s historic government shutdown.

Each year, the Bureau of Labor Statistics aligns its household survey data with more comprehensive Census Bureau estimates. These “population controls” are expected to result in significant downward adjustments to both population and labor force figures, largely due to lower immigration.