A disappointing jobs report shows employers cut 92 jobs in February. The report also included a downward revision to the previous two months and a slight rise in the unemployment rate. It paints a picture of a struggling labor market in several sectors, including some that have been engines of recent growth. Amna Nawaz spoke with Diane Swonk, chief economist at KPMG.
Amna Nawaz:
Let’s turn now to the economy and today’s disappointing jobs news shows employers cut 92 jobs in February. The report also included a revision to the previous two-month low and a slight rise in the unemployment rate from 4.3 to 4.4 percent.
Together, it paints a picture of a struggling labor market in several sectors, including some that have been engines of recent growth, such as health and construction. Stocks fell on the news, capping a week of declines, along with a sharp rise in oil and gas prices, the result of President Trump’s war with Iran. The average price of natural gas rose 11 percent this week.
To break down today’s numbers, we turn to Diane Swonk, chief economist at KPMG. It is a tax and consulting firm.
Diane, nice to see you.
So with the usual caveat it’s important not to add to one month of data, the losses in today’s report are widespread. What does all this tell you about the economy?
Diane Swonk, Chief Economist, KPMG:
Well, part of the loss of health care, this was one part that was a one-legged stool that lifted the labor market. And we’ve had massive strikes in California and Hawaii that will wipe out 27,000 health care workers with contract damages and a high level of unemployment and layoffs.
So that was part of it. But even removing that, it was still a lot of red ink. And if you lose one stool that lifted you up, you’re going to be poor and the unemployment rate will go up.
Amna Nawaz:
There has been a lot of talk about employers moving with uncertainty over changes in wage rates. How big is that uncertainty in all of this now?
Diane Swonk:
It’s really like a tax on the economy. There is no question about it.
We had increasing volatility last year and we are seeing it again this year. The point is, it’s like a broken light at a busy intersection. When you see traffic — a broken stop light, everyone slows down, traffic backs up. Some people get out and wait for the traffic light to be fixed or for the traffic to clear before going through the intersection.
It’s the same response you get from employers in times of extreme uncertainty. They cut back on investment decisions, especially hiring.
Amna Nawaz:
So, if we zoom out just a little bit here, Diane, apart from the two recent recessions, last year saw the lowest speed of average job growth since 2003. January, we saw an unexpectedly high number. Now we have unexpectedly low numbers. What does this mean for long-term trends?
Diane Swonk:
We are still seeing a very, very slow, labor market quality. It’s a down-to-earth, non-flammable labor market. That is not a good place to be. It’s a labor market where it’s very difficult for those people who haven’t found a job yet, fresh college grads or fresh high school grads, who are just entering the labor market to get their foot in the door when firms aren’t hiring healthily.
There is no typical churn in the labor market that we have seen, and, in fact, the ability to do jobs and earn a premium is about to emerge.
Amna Nawaz:
So in a low-fire, low-rent economy, what does that mean for average Americans who are experiencing this economy right now?
Diane Swonk:
Well, that’s what we’ve been up to for the past year now, and that’s not good. What we have seen are concerns about inflation and job security increasing, even as the economy has continued to grow.
We didn’t have a job in 2025, and it’s not – it shows a misunderstanding that people say how they feel about the economy because they’re facing this kind of conflict of unemployment and inflation.
And inflation is like stock returns. Stock returns compound over time and make people rich. On the other side of this, inflation is high and the highest it has been in five years. It is inclusive and puts the price level out of reach for the vast majority.
Amna Nawaz:
In the 30 seconds or so, I left, we know that the Federal Reserve will meet in another week-and-a-half to discuss possible rate cuts. What do you think we will see?
Diane Swonk:
They will not be able to reduce prices at this meeting. There will be one conflict, maybe two. But I think this is a very difficult situation for the Fed to move. It’s not the 1970s, but we’ve had five years of very high inflation, and the situation matters.
Amna Nawaz:
Diane Swonk, chief economist at KPMG, thank you very much for your time. It’s always nice to talk to you.
Diane Swonk:
Thank you.
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