US Employers Cut More Jobs Last Month Than Any February Since 2009/ Newslooks/ WASHINGTON/ J. Mansour/ Morning Edition/ The Trump administration’s massive federal cuts and swelling feelings of economic uncertainty helped fuel a recession-level spike in layoffs last month, new data showed Thursday. US-based employers last month announced plans to slash 172,017 jobs, a 103% increase from January and the highest February total since 2009, according to Challenger, Gray & Christmas’s latest monthly job cuts report released Thursday. It’s the 12th highest monthly total in the 32 years Challenger has been tracking job cuts. The 11 others (four came during the Covid-19 pandemic) all occurred when the US was in a recession, Challenger data shows.
US Job Market: Quick Look
- Jobless Claims Drop: 221,000 new claims, down 21,000 from last week.
- Historic Layoffs: 172,017 job cuts in February, a 103% surge.
- Federal Job Cuts Soar: 62,242 federal layoffs, 41,311% increase from last year.
- Sector Impact: Retail (38,956), Tech (14,554), Consumer Goods (10,625) hit hard.
- Hiring Slows: ADP reports private sector job growth fell sharply.
- Economic Uncertainty: Businesses cautious due to tariffs, layoffs, and recession fears.
- Looking Ahead: BLS jobs report Friday, federal cuts may hit later.
US Employers Cut More Jobs Last Month Than Any February Since 2009
Jobless Claims Fall, But Labor Market Faces New Threats
The Trump administration’s massive federal cuts and swelling feelings of economic uncertainty helped fuel a recession-level spike in layoffs last month, new data showed Thursday. US-based employers last month announced plans to slash 172,017 jobs, a 103% increase from January and the highest February total since 2009, according to Challenger, Gray & Christmas’s latest monthly job cuts report released Thursday. It’s the 12th highest monthly total in the 32 years Challenger has been tracking job cuts. The 11 others (four came during the Covid-19 pandemic) all occurred when the US was in a recession, Challenger data shows.
The largest share of job cut announcements came in the government sector, where the newly formed Department of Government Efficiency has axed jobs, slashed federal spending and scrapped contracts. By Challenger’s count, there were 62,242 announced cuts across 17 federal agencies. That’s a 41,311% increase from the 151 cuts announced through February 2024, Challenger noted.
The DOGE effect was not limited to the public sector: Downstream impacts, such as the loss of funding for private nonprofits, led to another 894 cuts, according to the report. Despite federal job cuts, US unemployment claims fell by 21,000 to 221,000 last week, showing labor market resilience. However, new data suggests trouble ahead as government layoffs, corporate cutbacks, and economic uncertainty mount. February saw 172,017 announced job cuts, marking the highest February total since 2009, according to Challenger, Gray & Christmas. The 12th highest monthly total ever recorded, these layoffs signal a potential recessionary trend.
“The job market has been strong, but uncertainty is rising,” said Martha Gimbel, economist at Yale University.
The DOGE Effect: Federal Cuts Drive Layoffs
The Trump administration’s cost-cutting initiative, led by the Department of Government Efficiency (DOGE), is at the heart of the historic layoff surge.
- 62,242 job cuts across 17 federal agencies, up 41,311% from 2024.
- Downstream impact: Nonprofits, contractors, and private companies tied to government funding cut 894 jobs.
- Total federal cuts could reach 80,000, per internal memos.
“These cuts are reshaping the economy in ways we haven’t seen before,” said Andrew Challenger, senior VP at Challenger, Gray & Christmas.
Job Cuts Beyond the Government
While federal job losses led the February surge, the private sector also suffered significant layoffs:
- Retail: 38,956 job cuts, as businesses adjust to rising tariffs and lower consumer spending.
- Technology: 14,554 layoffs, driven by cost-cutting and restructuring.
- Consumer Products: 10,625 jobs lost, amid weaker demand and inflationary pressures.
Hiring Slows as Businesses Brace for Uncertainty
The slowdown in hiring is another warning sign.
According to ADP’s latest report, private-sector employers added just 77,000 jobs in February—far below the expected 142,500.
“Companies are waiting to see how government policy changes play out before committing to expansion,” said Nela Richardson, ADP’s chief economist.
Economic Ripples: Consumer Spending Drops
Adding to concerns, consumer spending fell in January—its biggest drop since February 2021.
While some of the decline is seasonal, experts warn that tariffs, inflation, and rising job insecurity could slow economic growth in the coming months.
What’s Next? Federal Job Cuts May Hit Harder in Spring
While the latest BLS jobs report (due Friday) is expected to show continued job growth, economists caution that federal layoffs may not fully impact unemployment numbers until March or April.
“We are at a turning point,” said Claudia Sahm, chief economist at New Century Advisors. “The labor market has been resilient, but uncertainty is growing fast.”
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