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The U.S. added 151,000 jobs in February, government payrolls data showed Friday, fewer than the 160,000 economists had projected but a rise from the downwardly revised 125,000 in January. The unemployment rate unexpectedly rose from 4.0% to 4.1%. Month-on-month wage growth of 0.3% met consensus expectations.
While the February jobs report wasn’t a worst-case scenario — some observers talked about a number under 100,000 — it was still the smallest gain for any February since 2019. And the report shows that “hiring has slowed a lot and continues to decelerate,” Jefferies (JEF+0.48%) Chief U.S. Economist Thomas Simons said.
“The bottom line is that we don’t see signs flashing red of an imminent recession, but the economy and labor market is definitely slowing,” Simons wrote in a note to clients. Slowing employment growth will eventually shift Federal Reserve officials toward an interest-rate easing bias, he said.
Economists have been divided on whether the labor market is slowing across the board or whether recent numbers showing reduced hiring and a bigger-than-expected rise in the number of continuing unemployment claims instead reflect seasonal and one-time factors. The number of new weekly claims for jobless benefits fell more than expected.
Employers more generally may be delaying filling job openings and slowing or postponing capital spending plans due to uncertainty over issues including President Donald Trump’s tariffs, Mai Capital Management’s Chief Market Srategist Christopher Grisanti told Quartz before the numbers.
“The danger is that it becomes a self-fulfilling prophecy with fear of a slowdown leading to an actual slowdown,” he wrote in an email.
Some data point toward a greater labor market slowdown: U.S.-based employers said they would lay off more than 172,000 people last month, a 245% increase from January and a doubling year-on-year, according to a Challenger, Gray & Christmas report.
The outplacement firm noted that employers have announced 221,812 job cuts, the highest year-to-date total since 2009, when 428,099 cuts were planned. Anecdotally, Microsoft (MSFT+1.86%) has axed almost 2,000 workers so far this year, but claims the cuts are performance-based, Business Insider reported.