In February 2025, U.S.-based employers announced a staggering 172,017 job cuts, marking the highest monthly total since July 2020 and the largest for any February since 2009.

Economists do not expect an immediate rise in the overall unemployment rate, attributing this to the relatively small size of the federal workforce in comparison to the total job market.

The government sector was hit hardest, accounting for 62,242 layoffs across 17 federal agencies due to initiatives by the newly established Department of Government Efficiency (DOGE).

Despite these layoffs, the labor market remains uncertain, as consumer surveys indicate concerns over inflation and job security, although some economic indicators suggest resilience.

Consumer spending saw its first decline in January 2025 in nearly two years, contributing to a cautious economic outlook as the largest monthly drop since February 2021.

The retail sector also faced significant challenges, with 38,956 layoffs reported, driven by major companies like Macy's and Forever 21, reflecting a nearly six-fold increase in cuts compared to the previous year.

Economic uncertainty is further exacerbated by President Trump's tariff threats against Mexico and Canada, alongside fears of a potential recession, which are impacting job stability.

Andrew Challenger, senior vice president at Challenger, Gray & Christmas, noted that private sector layoffs, particularly in retail and technology, stem from canceled government contracts and trade war fears.

Challenger's report highlighted that 894 job losses occurred downstream from the DOGE layoffs, particularly affecting nonprofit organizations reliant on federal funding.

Legal challenges have emerged against the mass layoffs, with a federal judge ordering the Office of Personnel Management to rescind directives at over 24 agencies, although voluntary departures may still occur.

Despite the significant job cuts, the U.S. economy shows signs of resilience, with low unemployment rates and an increase in hiring plans, as evidenced by 34,580 job additions announced in February.

Looking ahead, the Bureau of Labor Statistics is expected to report a net gain of 160,000 jobs for February, with the unemployment rate remaining stable at 4%.