What you should look for in the employment report released today

Economic Uncertainty Impacts US Job Market

Workers at the Riverfront Development project along the Trinity River in Dallas, Texas, on February 23, 2026. - Jonathan Johnson/Bloomberg/Getty Images

Widespread economic instability, largely attributed to President Donald Trump’s notable trade policies, has forced numerous small businesses to reduce staff, postpone growth initiatives, or cut back on output.

ValenSil Technologies: A Case Study

ValenSil Technologies, an aerosol filling company based in Avon, Ohio, experienced significant growth leading into 2025. The company expanded its facilities, introduced a second shift, and nearly tripled its workforce to 47 employees.

Business was thriving to the point that ValenSil planned to add a third shift, hire an additional eight to fifteen workers, and even considered acquiring more land for further expansion.

However, these ambitions were quickly shelved. The company eliminated the second shift and saw its workforce shrink—not through layoffs, but as employees left and were not replaced.

Jim O’Connor, who oversees purchasing and hiring at ValenSil, pointed to high tariffs on materials like aluminum and the unpredictable way these tariffs were enforced as the main reasons for the downturn. He explained that this uncertainty discouraged clients from placing orders.

“We experienced a significant slowdown and were hoping for things to stabilize,” O’Connor said.

He remains convinced that demand still exists, but clients are hesitant to make decisions due to ongoing unpredictability.

Reflecting Broader Labor Market Trends

ValenSil’s experience mirrors a larger trend in the US workforce, where both hiring and firing rates have slowed—a pattern expected to be highlighted in the upcoming February jobs report.

Any hopes for stability have been quickly dashed by recent events: a major Supreme Court decision affecting trade policy, a large-scale layoff linked to artificial intelligence, and the outbreak of a new conflict in the Middle East.

Nela Richardson, chief economist at ADP, summed up the situation: “These are three very different global events, but they all boil down to one thing: uncertainty. This unpredictable environment is clearly influencing hiring decisions.”

Looking Back and Ahead

The Bureau of Labor Statistics will release its latest jobs report at 8:30 a.m. ET on Friday, offering a snapshot of the labor market before these recent disruptions.

Analysts expect the report to show that hiring remains subdued compared to previous years, but mass layoffs are also not widespread. The labor force is shrinking, partly due to retiring Baby Boomers and decreased immigration, which further limits hiring.

Recent Employment Data and Trends

Economists predict that US employers added around 60,000 jobs last month—a significant drop from January’s estimated 130,000 new positions. January’s higher numbers were likely influenced by unique factors, such as fewer post-holiday layoffs and unusually warm weather that benefited sectors like construction.

The unemployment rate for February is expected to remain at 4.3%, with wage increases continuing to outpace inflation.

ADP’s latest report noted a rise in private-sector hiring, especially in health care, and steady wages for those who stayed in their jobs. Weekly initial jobless claims—a key indicator of layoffs—have stayed low, with the Labor Department reporting 213,000 new claims in the last week of February, nearly unchanged from the previous week.

Continuing claims, which reflect how long people remain unemployed, reached 1.868 million for the week ending February 21, up by 46,000. This figure had been near four-year highs for much of the previous year but has eased somewhat in early 2026.

Layoff announcements also declined in February. According to Challenger, Gray & Christmas, US employers announced 48,307 job cuts last month—a 55% decrease from January.

“February’s drop is a welcome break from the high number of job cuts at the start of the year,” said Andy Challenger, chief revenue officer at the firm. However, he warned that this trend could reverse.

Technology companies accounted for the largest share of layoffs, with 11,039 job cuts. Of these, 4,000 were at payment app company Block, where CEO Jack Dorsey attributed the reductions to increased use of AI.

Challenger noted, “With US involvement in a growing conflict in Iran, companies may announce more layoffs as they brace for uncertainty and rising costs.”

The layoffs at Block have intensified concerns about AI’s impact on the already fragile job market, but Challenger pointed out that other factors are also at play, including global regulations, a slowdown in digital advertising due to tariffs and economic uncertainty, and higher costs for both labor and financing.

Important Data Considerations

January’s employment reports are typically among the most complicated due to post-holiday adjustments and annual revisions. February’s data is usually clearer, but this month’s report will include several unusual factors:

• Payroll numbers are expected to be skewed by the strike of about 31,000 health care workers during the survey week. Since the strike ended on February 23, these jobs will reappear as gains in March’s report.
• Severe winter weather likely slowed hiring in sectors sensitive to climate, such as construction and hospitality.
• This month’s report will also feature annual revisions 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 show significant downward adjustments in both population and labor force numbers, mainly due to lower immigration.