February Jobs - Solid Report All Things Considered

February hiring rises at solid pace; unemployment edged higher.  Nonfarm payrolls increased 151K in February following a (downwardly revised) gain of +125K in January.  The unemployment rate ticked 0.1% higher to 4.1%.  Overall, today’s report highlights a labor market that continues to gradually cool amid rising economic uncertainty.  Over the last three weeks, investors have increased 2025 expectations from one to two interest rate cuts to three cuts.  Fed policymakers would like to see more evidence that inflation is sustainably easing before cutting further and given high uncertainty around the Trump administration’s policy moves, officials are widely expected to keep rates steady at their meeting on March 19.

151K jobs added in February – below expectations but up month over month.  The U.S. labor market added 151K jobs in February compared to expectations for +160K.  January job gains were revised downward to +125K from +143K originally reported.  While below expectations, February’s outcome reflects solid job growth generally consistent with average gains of 168K over the last twelve months.  Federal government employment declined by 10K jobs in February – an area to keep an eye on amid Trump administration efforts to reduce the Federal workforce.

4.1% unemployment – up from 4.0% in January.  The U.S. unemployment rate ticked 0.1% higher in February to 4.1% – up from 4.0% to start the year.  The unemployment rate has remained in a narrow range of 4.0% to 4.2% since May 2024.  The labor force participation rate contracted 0.2% to 62.4%.  Wage growth was largely unchanged 4.0% year-over-year and decelerated slightly to +0.3% month-over-month.