United States: Job gains disappoint in February
Latest reading: Total non-farm payrolls grew by 151,000 in February, above the downwardly revised 125,000 gain in January and slightly below market expectations. Federal government jobs fell as part of the new Trump administration’s push to slim the size of the state. Meanwhile, the unemployment rate ticked up to 4.1% in February from 4.0% in January.
Looking at January and February together shows that job growth has slowed this year from the Q4 average, but is still close to the figures recorded in Q2 and Q3 last year. That said, further downside surprises are possible going forward giving ongoing efforts to cut the federal workforce and the potentially chilling effect of tariffs on the labor market.
Panelist insight: Digging into the data, Nomura analysts said:
“Government job gains slowed to 11k, with steady growth in state and local offsetting a 10k decline in federal workers. The Trump administration’s hiring freeze likely drove the decline in federal government employment. Widespread layoffs of federal workers were reported to pick up in mid-February (after the survey reference week for this report), suggesting a greater contraction is likely in next month’s NFP.”