Goods From Canada, Mexico Still Exposed to U.S. Tariffs, Despite Pause
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Uncertainty around trade policy keeps the Fed in a holding pattern on rates. Plus, which goods from Canada and Mexico are still exposed to U.S. tariffs? The answer is less straightforward than it might seem.
What we're going to see in the next month or so is businesses scrambling to figure out, well, should they file the paperwork? Should they not? What is the cost around filing the paperwork versus maybe just waiting for another month and seeing if Trump's policy changes again?
And are egg producers engaged in foul play in setting prices? The Justice Department wants to find out. It's Friday, March 7th. I'm Alex Osola for The Wall Street Journal. This is the PM edition of What's News, the top headlines and business stories that move the world today. New data out from the Labor Department today shows that the U.S. added 151,000 jobs in February. That's slightly below the gain of 170,000 jobs economists expected to see, but better than the 125,000 jobs added in January. The unemployment rate, which is based on a separate survey from the jobs figures, rose to 4.1 percent from 4 percent. To give us some insight behind the numbers, I'm joined now by WSJ economics reporter Justin Lehart. OK, Justin, what stood out to you in this jobs report?
The first thing that stood out was we saw a decline in federal government jobs. We saw a decline of 10,000. And so economists don't think that the layoffs that we saw last month have really registered just because of when the Labor Department collects the data for the report. Those layoffs really hadn't happened yet. However, there was a hiring freeze. So it does suggest that the hiring freeze that went into effect when Trump came into office, that may have led to increased attrition. And so that's sort of the leading edge of some of the government job cuts that we expect to see.
And of course, the big question every time we get a Dodge report, does this change anything for the Fed?
Not at this point. We might see weakness in the months ahead. Most economists expect to see that. This month, the Fed can leave rates on hold as widely expected to. If you see deterioration in the job market, that could lead to a cut. There is a complication, of course, with tariffs expected to raise prices. You could get inflation going one way, jobs going the other way. That puts the Fed in a very tough spot.
That was WSJ economics reporter Justin Lehart. Speaking at a conference in New York today, Fed Chair Jerome Powell said the central bank is comfortable with its wait-and-see approach to rate cuts as it digests the effects of changing policy.
Looking ahead, the new administration is in the process of implementing significant policy changes in four distinct areas. Trade, immigration, fiscal policy, and regulation. It is the net effect of these policy changes that will matter for the economy and for the path of monetary policy. While there have been recent developments in some of these areas, especially trade policy, uncertainty around the changes and their likely effects remains high. As we parse the incoming information, we are focused on separating the signal from the noise as the outlook evolves. We do not need to be in a hurry, and we are well positioned to wait for greater clarity.
The Fed chair said that despite uncertainty, the U.S. economy continues to be in a good place. U.S. stocks turned higher today following Jerome Powell's remarks, but remained lower on the week after an onslaught of tariff-related news. The Dow rose about half a percent, the S&P 500 went up around 0.6 percent, and the Nasdaq closed 0.7 percent higher. Previously on the show, we've talked about how a new guard of defense startups are trying to secure contracts from Trump's Pentagon. Andril is one such company, and its founder, tech veteran Palmer Luckey, was part of a minority in the tech sector that supported Trump during his first run for the White House. This week, Luckey joined our sister podcast Bold Names to talk about how he's trying to remake the government's approach to national security.
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