The number of jobs added came in a little below estimates.
The U.S. economy added 151,000 jobs in February, according to the U.S. Bureau of Labor Statistics. The number came in below expectations, as economists had anticipated 170,000 new jobs last month.
Also, the unemployment rate ticked up to 4.1%, from 4.0% in January. Economists had predicted it would stay at 4.0%.
Further, hourly wages rose 0.3%, which was in line with expectations, but down from 0.5% in January. Year-over-year, hourly wages have risen 4.0%, down from 4.1% in January and below estimates of 4.2%.
The markets were flat or trending slightly lower in early trading. The Russell 2000 took the biggest hit, dropping 34 points, or 1.6%. The Dow Jones was down about 100 points, or 0.2%, while the Nasdaq and S&P 500 were essentially flat.
As to whether it moves the needle for the Fed, interest rate traders say no. In fact, the percentage of traders that think rates will remain unchanged in March went up to 95% today, up from 88% yesterday. Only 5% expect the Fed to lower rates in March, down from 12% on March 6, according to CME FedWatch.
Massive job cuts in February
The February jobs numbers were impacted somewhat by the massive amount of job cuts that occurred in February. Some 172,000 job cuts were announced in February, the most since July of 2020. Of those 172,000 job cuts, roughly 62,000 are federal jobs, with layoffs stemming from the newly created Department of Government Efficiency (DOGE).
Economists did not anticipate that the February DOGE cuts would have a major impact on the February jobs report that much, probably because many of the announced cuts and buyouts did not take effect by the end of the month.
That was indeed the case, as the BLS reported a 10,000 reduction in the federal government workforce last month. That was roughly in line with estimates. However, with more federal job cuts and buyouts expected, the employment numbers could continue to be negatively affected by federal job reductions.
Health care adds the most jobs
Also, in the health care industry, 52,000 jobs were added in February, roughly in line with the average monthly gain of 54,000 over the prior 12 months. Employment in financial activities rose by 21,000 in February, above the prior 12-month average gain by about 5,000 jobs.
Further, employment continued to trend up in real estate and rental and leasing, as those industries added 10,000 jobs. Transportation and warehousing employment added 18,000 jobs.
In addition, employment in retail trade was down about 6,000 jobs, while employment in food and beverage retailers declined by 15,000, largely due to strike activity.
Employment showed little change over the month in other major industries, including mining, quarrying, and oil and gas extraction; construction; manufacturing; wholesale trade; information; professional and business services; leisure and hospitality; and other services.
