The US labor market expanded in February with 151,000 positions added to payrolls, slightly exceeding January’s adjusted total of 125,000 jobs. The unemployment rate remained at 4.1%, marginally higher than the 4% recorded in January. Economists had anticipated 170,000 new jobs would be created during the month.
Federal employment contracted by 10,000 positions, but gains in healthcare, financial activities, transportation and warehousing, and social assistance sectors offset these losses. The jobs report was compiled from survey data collected during the second week of February, meaning larger federal government reductions that occurred later in the month have not yet appeared in the official statistics.
Economists noted mixed signals emerging from the broader labor market. Capital Economics’ Thomas Ryan characterized the report as evidence the economy “started the year soft but is not plummeting towards a recession,” while cautioning that federal workforce reductions could exert greater pressure on employment figures in subsequent reports. Private-sector hiring continued at what Ryan described as a “fairly healthy” pace.
Other recent labor indicators suggested deceleration. ADP reported just 77,000 new hires in February, roughly half the expected volume. Challenger, Gray & Christmas documented 172,017 announced job cuts across US employers in February, marking the highest monthly total since July 2020. Federal agencies accounted for more than 62,000 of these reductions across 17 different departments.
Uncertainty surrounding government policy changes contributed to broader economic headwinds. Consumer confidence experienced its steepest monthly decline in nearly four years during February. The Federal Reserve is scheduled to convene on 18 and 19 March to deliberate on interest rate policy, with officials weighing ongoing tariff discussions, immigration policy shifts, and fiscal considerations alongside labor market conditions.
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