Employers added 151,000 jobs in February, lacking forecasts

Employers throughout the U.S. added 151,000 jobs in February, under economists’ forecasts and pointing to a slowdown within the labor market amid indicators of slowing financial development.

The numbers

Economists had forecast that the economic system added 160,000 jobs final month, in line with a ballot by FactSet. 

The unemployment fee final month was 4.1%, barely increased than the 4% fee forecast by economists polled by FactSet.

Hiring has eased since December’s blowout variety of 323,000 new jobs, however the labor market has remained resilient in the beginning of 2025, consultants say. 

What it means

The February job figures recommend the labor market “is exhibiting indicators of weak spot with hiring throughout sectors,” stated Joe Gaffoglio, CEO of Mutual Of America Capital Administration, in an electronic mail. 

He added, “Deteriorating indicators like hiring intentions, new job listings and non permanent staffing recommend a possible slowdown in employment development.”

Notably, the widespread, ongoing cuts throughout the federal government sector additionally aren’t mirrored in at this time’s report, in line with Andy Stettner, an unemployment insurance coverage skilled at The Century Basis. That is as a result of unemployment claims for federal employees can take a number of weeks to seem within the official authorities knowledge, he famous. 

Though the complete influence of these cuts aren’t but seen within the knowledge, federal employment declined by 10,000 final month, the Bureau of Labor Statistics stated on Friday. The U.S. has greater than 2 million federal employees.

Layoffs throughout the U.S. spiked final month to their highest ranges since 2020, led by firings of federal employees ordered by Elon Musk’s Division of Authorities Effectivity, or DOGE,  outplacement agency Challenger, Grey & Christmas stated on Thursday. 

Employers lower greater than 172,000 jobs final month, a 245% improve from January and double the quantity introduced throughout the identical month a yr in the past, the corporate stated. That marks the very best month-to-month variety of layoffs since July 2020, when almost 263,000 cuts have been introduced, the agency added.

What the consultants say

The marginally weaker-than-expected February jobs report might immediate the Federal Reserve to renew reducing its benchmark fee, famous Lindsay Rosner, head of multi sector mounted revenue investing at Goldman Sachs Asset Administration. 

The Fed in January hit the brakes on rate of interest cuts, citing persistent inflation. However Fed Chair Jerome Powell has signaled the central financial institution is carefully watching the labor marketplace for indicators of weak spot, which might immediate further fee cuts.

The Fed will obtain another piece of main financial knowledge forward of its subsequent fee resolution assembly, scheduled for March 19, with the Client Value Index set to be launched on March 12. The CPI probably rose 2.9% final month, barely easing from January’s 3% tempo, in line with FactSet.

President Trump’s tariffs are anticipated to increase costs for customers, though they are not more likely to present up in inflation knowledge for a number of months as Mr. Trump on Thursday paused 25% tariffs on Mexico and Canada till early April. 

“General, this report is a sigh of reduction for the Fed as they will proceed to take a seat on the sidelines for the following couple conferences as they assess the potential inflation impacts ensuing from U.S. tariff coverage over the approaching months,” stated Charlie Ripley, senior funding strategist for Allianz Funding Administration, in an electronic mail.

Presently, solely about 1 in 10 economists polled by FactSet count on the Fed to chop charges at its March 19 assembly. About half of these polled are forecasting a fee lower on the Fed’s subsequent assembly, scheduled for Could 7.

“The payrolls development stunned barely to the draw back and the unemployment fee ticked up justifying the momentum that is been constructing for a resumption within the Fed’s reducing cycle,” Rosner famous.