Economy watchers may feel like someone waking up with a low-grade fever after hoping rest would cure their emergent sniffles. US employers unexpectedly shed 92,000 jobs in February, according to data the government released yesterday, quashing exectations of a stabilizing job market. That’s likely to compound economic anxieties related to the Iran war.

Though wage growth remained strong, the sudden job losses—a sharp reversal from January when the economy added 126,000 jobs—caused the unemployment rate to creep up to 4.4%.

Is it just a temporary blip?

Part of February’s employment dip was due to strikes reducing healthcare employment, as well as arctic weather stalling hospitality and construction work. But:

• Payrolls also shrank in other sectors, including government, manufacturing, and information technology.
• Plus, we now know the US shed jobs in December, too, as yesterday’s data revised hiring for that month down from a gain of 48,000 to a loss of 17,000.

Is AI the culprit? While many companies say AI reduces their need for human workers, some analysts say pandemic-era overhiring might be behind layoffs and anemic hiring. Plus, lower immigration levels could be reducing the pool of workers available to sign offer letters.

Now, there’s also war

The weak jobs report, suggesting economic shakiness, reflects a reality before the war in Iran disrupted industries. Since then:

• Gas prices jumped by more than 30 cents a gallon this week after Iran began hindering shipments of Middle Eastern oil to global markets. And experts say the disruptions to the waterway could make other products pricier.
• With stocks falling on fears of a prolonged war, shrinking 401(k) plans threaten to further undermine consumer confidence and imperil job growth.

Looking ahead…accelerating price growth and weak hiring is a double whammy for the Fed as it tries to set interest rates to keep employment high and inflation low. But investors still expect the Fed to keep interest rates steady during their upcoming meeting this month, with some central bank officials saying it’d take more economic alarm bells to prompt rate cuts.—SK

  Trump says “no deal with Iran except UNCONDITIONAL SURRENDER!” Following reports (denied by Iran) that the country had reached out to the US about ending the war that began when the US and Israel struck Iran, President Trump, in a Truth Social post, called for only “unconditional surrender,” dashing hopes for a fast resolution. The president also called for “the selection of a GREAT & ACCEPTABLE Leader(s).” Meanwhile, Israel said it had entered a new phase of the war and heavily attacked Tehran and southern Lebanon. Trump also said American defense firms had agreed to “quadruple Production of the ‘Exquisite Class’ Weaponry.”

Customs gets more time for tariff refunds. Yesterday, a federal judge pared back his own order requiring Customs and Border Protection to immediately pay back $166 billion to companies that had paid tariffs imposed by President Trump, which were struck down by the Supreme Court, to give the agency more time. Earlier in the day, CBP said in a court filing that it could not immediately comply with the order, but could update its system to enable refunds in 45 days. However, the government has also said it plans to appeal the judge’s ruling ordering the refunds, which could introduce more delays.

  Big Tech says users can still have Anthropic’s AI, outside of defense work. Although the Department of Defense has labeled Anthropic a “supply chain risk,” which bars military contractors from working with it, Google, Microsoft, and Amazon have all said their users can still access Claude, just not for defense work. However, Anthropic will likely have to stop working with Palantir. Anthropic, meanwhile, has vowed to fight the DOD’s designation in court. The clash has raised the company’s profile with consumers, sending its downloads and daily active user count skyrocketing.—AR

AI companies need data centers built at hyperspeed. To attract the necessary trade workers, they are erecting what have been dubbed “Man Camps”—temporary housing near the construction site that comes with amenities like free steak, game rooms, and golf simulators, per a Bloomberg report.

Why the push for sleepaway Dave & Buster’s? With data centers popping up in remote locations, these perks are designed to incentivize construction workers to temporarily relocate.

Dwell-paying business: Companies like Target Hospitality Corp. and Civeo Corp. specialize in short-term housing that can support hundreds of workers for months at a time before packing up and moving to the next town:

• Target Hospitality, which also builds immigration detention centers, projects it’ll make $331 million from data center buildouts over the next two years.
• Bloomberg Intelligence estimates that $700 billion worth of these mobile housing projects are in the development stage.

Hire more women campers : While Man Camps may sound like a divorced guy paradise, women are welcome, and husband-wife teams are wanted, too.

Electric gold rush: It’s not just construction—data center electricians are making $130 per hour, while the average electrician is getting $30 per hour, according to ZipRecruiter. And no trade job may be as important—more than 300,000 new electricians are projected to be necessary to complete data center buildouts over the next decade.—DL