The economy held its own in the first jobs report of President Trump's second term, but there are choppy waters ahead amid concerns over the trade war, federal government layoffs, a stock market sell-off and declining consumer confidence.
The U.S. added 151,000 jobs in February and unemployment ticked up to 4.1 percent, both of which were in line with expectations.
However, the February jobs report does not account for the hundreds of thousands who have been fired as part of Trump's efforts to scale back the federal workforce.
"The market and the economy have become hooked, become addicted, to excessive government spending, and there's going to be a detox period," Treasury Secretary Scott Bessent said on CNBC.
Federal Reserve Chair Jerome Powell said the central bank is working to separate "the signal from the noise" as it formulates a monetary policy around the flurry of activity from the Trump administration.
"The new administration is in the process of implementing significant policy changes," Powell said. "We are focused on separating the signal from the noise as the outlook evolves. We do not need to be in a hurry."
The trade war continues, even after Trump postponed the bulk of the tariffs he placed on Canada and Mexico this week.
Trump threatened new tariffs on Canadian dairy and lumber Friday, one day after postponing most of the tariffs he implemented earlier this week.
Canada's tariffs on U.S. products remain in place despite Trump's delay on tariffs for most Canadian goods coming into the U.S.
Ontario plans to slap a tariff on electricity going to three U.S. states beginning Monday.
Some Republicans are growing concerned about the impact of tariffs on their constituents.
Sen. Rand Paul (R-Ky.) told CNN: "Almost every industry in Kentucky has come to me and said, 'It will hurt our industry and push up prices of homes, cars,' and so, I'm going to continue to argue against tariffs."
The conservative Wall Street Journal editorial board urged industries and interest groups to sue the Trump administration to end the tariffs.
Trump insists the tariffs are necessary to bring more manufacturing to the U.S. and to pressure Mexico and Canada to clamp down on illegal drugs coming into the U.S.
Trump's top economic aide brushed off concerns that the tariffs could strangle the economy.
"No, we're not headed for a recession," White House National Economic Council Director Kevin Hassett said on Fox Business.
Trump found support for some of his tariffs in a surprising place Friday.
Rep. Chris Deluzio (D-Pa.) said he disagrees with Trump's "chaotic and inconsistent" approach to tariffs. But he urged Democrats to be open to some of them, saying tariffs are popular among some of his working class constituents in the Rust Belt.
"If you oppose all tariffs, you're signaling that you're comfortable with exploited foreign workers making your stuff at the expense of American workers," he posted on X. "I'm not and neither are most voters."
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