The February jobs report out Friday offered few surprises for investors, with job gains increasing slightly and the unemployment rate rising to 4.1% amid heightened investor fears over the trajectory of the US labor market and the broader economy.
Data from the Bureau of Labor Statistics released Friday showed 151,000 new jobs were created in February, less than the 160,000 expected by economists but more than the 125,000 seen in January. The unemployment rate rose to 4.1% from 4% in the prior month. January’s monthly job gains were revised lower from a previous reading of 143,000.
With the Department of Government Efficiency’s (DOGE) job cuts in focus, federal government employment declined by 10,000 in February.
RSM chief economist Joe Brusuelas told Yahoo Finance the February jobs report was a “Goldilocks” print.
“We know that over the next three to six months, we’re going to see some of the disruptive effects in Washington start to show up in both the economy and in the labor market,” Brusuelas said. “But for now, what this tells us is that we really only need to add about 100,000 to 150,000 jobs a month to keep employment stable. That’s exactly what happened.”
Wage growth, an important measure for gauging inflation pressures, rose 4% over the prior year in February, down from the 4.1% seen in January. On a monthly basis, wages increased 0.3%, below the 0.4% seen the prior month.
Meanwhile, the labor force participation rate fell to 62.4% from the 62.6% seen in January.
“The upshot is that the labour market remains in decent shape and should be able to weather the DOGE-related cull of federal government employees, although we will have to wait until next month to assess the damage,” Capital Economics North America economist Thomas Ryan wrote in a note to clients.
The report comes during a week full of whipsaw market action, as investors have digested a string of weaker-than-expected economic data and a consistent flow of tariff headlines from President Trump that have muddled the growth outlook.
On Thursday, the Nasdaq Composite (^IXIC) officially entered a correction, as the index is now more than 10% off its mid-December record close, while the S&P 500 (^GSPC) closed at its lowest level of the year.
Market bets on Federal Reserve interest cuts moved little following Friday’s release while the three major stock indexes were up slightly.
Investors are still pricing in three interest rate cuts for this year, above the range of one or two seen last month, per Bloomberg Data.