One of the chief concerns is the lowered rate of job participation, and while the BLS deems it negligible, - 61.9 % - but economists are watching the figure and see that the downward trend is concerning, the less people working, or giving up looking the less the match to population growth and the formula that economists examine to determine the health of the US economy.
“The unemployment rate dropped, but for the wrong reasons: a loss in labor force participation,” Diane Swonk, chief economist at KPMG told Fortune. The declines were concentrated among prime working-age men (twenties to thirties); young women between ages 20 and 24; and men over 55. In other words, the unemployment rate fell not because people found work, but because they became discouraged and stopped looking.”
Add to that the deportation of undocumented workers by the Trump administration and the uncertainty regarding judicial oversight, things don’t seem as rosy as they seem, But, a single report does not hold significance for macro economists, since there is the rule of three reports to accurately predict future concerns.
And, as is BLS custom, all reports are subject to revision as we saw with February that gave a few concerns with its decrease of 133,000, among economists, as well as lawmakers.
One surprise was that construction added 26,000 people to their payrolls and while much of this gain was due to project specific contracts, it is still far less than it has been in the past.
Much of this increase has been attributed to the policies of President Trump, and campaign promises, but this is unclear as of this date.
Federal employment has continued its downward spiral after the DOGE decimation of last year, now down to 355,000 or 11.8 percent, yet there are unverified reports that there are efforts to increase hiring.
Taken together with the threats of AI in the workforce, especially for some programmers, that is a matter of controversy with wildly fluctuating reports varying from total elimination of some jobs, entry-level and white-collar, to the retraining of others.
Forbes noted that, “The pressing question is, ‘You’re going to have a technological shock — how painful is it going to be?” Martha Gimbel, the executive director of the Budget Lab at Yale University, told the [New York] Times."
“At this point, no one knows. Maybe it will be far less than some of the high estimates thrown about. What investors, workers, and the country at large have to realize is there is a risk of unknown size that could further undermine the labor market, also known as the ability of people to make money and live.”
There are a few groups of workers that are vulnerable in today’s job climate: younger workers, those under 25 years of age, especially recent college graduates, and Black and Asian workers.
Taking a rear view look at the beginning of the year, “Through February, employers announced 156,742 job cuts, the lowest January-to-February total since 2022, when 34,309 cuts were recorded in the first two months of the year. It is the fifth-highest January-February total since 2009.”
“February’s dip is a nice reprieve from the elevated job cut plans to start the year. With U.S. involvement in a growing war in Iran, the end of Q1 may bring more layoff plans as companies tighten belts amid uncertainty and higher costs,” said Andy Challenger, workplace expert and chief revenue officer for Challenger, Gray & Christmas,” in their statements posted on their website.
In a forecast for the future, based on their prior analysis, “Hiring plans rose 140% in February to 12,755 from 5,306 in January. They are down 63% from the 34,580 hiring plans in February 2025. So far this year, employers have announced plans to hire 18,061, down 56% from 40,669 new hires during the same period in 2025.”
Wages increased by 0.2 percent after reaching 0.4 percent in February, and further decreases with the higher inflation dependent on the continuing war in the Middle East could cause American consumers to cut back on their spending and with further layoffs, earnings of Big Tech firms, reportedly 32 percent of the S&P 500’s value would sink pulling downwards at the top of the K, according to Dario Perkins, an economist a consultant at TS Lombard, reported This Week.
Taking an even broader look we are still seeing the K shaped economy that we noted last month, the “golden age” that Trump says Americans are living in, most industries are in a hiring freeze inflation is still at 2 percent, and with the richest 1 percent holding nearly 32 percent of the nation’s wealth as they also reported, the future for America’s working families remains uncertain.
With income equality still a present reality there is speculation as to whether it will last or not, but Mark Zandi chief economist at Moody’s Analytics, said to them “This is not a cyclical or temporary phenomenon, he said, noting that it’s “structural.”
Of course, the Israeli-American war and the loss of access to the Stair of Hormuz has increased the cost of gasoline to over $4.00 a gallon and in some stations in Chicago we have seen prices of regular gasoline as high as $4.59 a gallon. Consumers, especially those with children will be hard pressed to balance the family budget with increasing rents, a shortage of affordable housing, and the higher cost of food, already seen in some areas.
Of note, “This is not the kind of oil shock economists typically look through. Those tend to hit both sides of the equation at once, slowing growth while raising prices, and eventually wash out. This one “is more COVID-esque,” Swonk said, pointing to supply-chain disruptions that extend far beyond crude—from diesel and jet fuel to helium, a key input in semiconductor production. Swonk said CFOs she has spoken with are watching shipping costs soar after the transportation sector had just begun recovering from a recession.”
Add that to the cost of producing crops and the increasingly high costs of fertilizer, {the US is the world’s highest consumer},not to mention the cost of transporting food, the golden age looks deeply tarnished, and despite the repeal of some tariffs by the US Supreme Court, some farmers are still reeling from the president’s tariffs, specifically those that were not able to make purchases before the tariffs hit. To make matters worse, agricultural economists are predicting a 40 percent increase in the cost of fertilizer creating possible food shortages in American supermarkets.
Taking the long view of the March numbers is Federal Reserve Chair Jerome Powell who said, “You can have a series of these supply shocks and that can lead the public generally — businesses, price setters, households — to start expecting higher inflation over time. Why wouldn’t they?” Jerome H. Powell, the Fed chair, said at an event this week” reported The New York Times.
Despite this risk, Mr. Powell did not convey any immediate urgency to take action, saying instead that the Fed’s policy was “in a good place for us to wait and see how that turns out.”
