The February jobs report released on Friday brought a mix of news for the economy. Job growth showed a slight increase, but the unemployment rate rose to 4.1%, raising concerns among investors about the US labor market and overall economic health.
According to data from the Bureau of Labor Statistics, 151,000 new jobs were created in February. This figure fell short of the 160,000 expected by economists but was an improvement from January’s 125,000. Notably, the unemployment rate climbed from 4% to 4.1%, and job growth in January was revised down to 143,000.
Federal government employment saw a decline, dropping by 10,000 jobs in February due to cuts from the Department of Government Efficiency (DOGE).
Joe Brusuelas, chief economist at RSM, described this month’s report as “Goldilocks.” He noted that while upcoming months may show some disruptions due to changes in Washington, the current job numbers suggest that to maintain stable employment, the economy only needs 100,000 to 150,000 jobs added each month—a target that was met.
Wage growth, an important indicator of inflation trends, rose by 4% year-over-year in February, a slight decrease from January’s 4.1%. Monthly wage growth was at 0.3%, below the previous month’s 0.4% increase.
The labor force participation rate also dipped to 62.4%, down from 62.6% in January. Despite these changes, economist Thomas Ryan from Capital Economics said that the labor market is still holding up well. He mentioned that it could withstand the federal job cuts, but we’ll need another month to evaluate the full impact.
This report came during a week of market volatility, with investors reacting to several weak economic indicators and mixed messages from tariff-related news. The Nasdaq Composite entered a correction phase, dropping over 10% from its mid-December peak, while the S&P 500 reached its lowest point of the year.
Following the jobs report, bets on interest rate cuts by the Federal Reserve remained stable. Many investors still anticipate three rate cuts this year, an increase from the one or two expected last month.
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Source linkunemployment rate, labor market, federal government employment, Bureau of Labor Statistics
