Employers across the U.S. added 151,000 jobs in February, below economists’ forecasts and pointing to a slowdown in the labor market amid signs of slowing economic growth.
The numbers
Economists had forecast that the economy added 160,000 jobs last month, according to a poll by FactSet.
The unemployment rate last month was 4.1%, slightly higher than the 4% rate forecast by economists polled by FactSet.
Hiring has eased since December’s blowout number of 323,000 new jobs, but the labor market has remained resilient at the start of 2025, experts say.
What it means
The February job figures suggest the labor market “is showing signs of weakness with hiring across sectors,” said Joe Gaffoglio, CEO of Mutual Of America Capital Management, in an email.
He added, “Deteriorating indicators like hiring intentions, new job listings and temporary staffing suggest a potential slowdown in employment growth.”
Notably, the widespread, ongoing cuts across the government sector also aren’t reflected in today’s report, according to Andy Stettner, an unemployment insurance expert at The Century Foundation. That’s because unemployment claims for federal workers can take several weeks to appear in the official government data, he noted.
Although the full impact of those cuts aren’t yet visible in the data, federal employment declined by 10,000 last month, the Bureau of Labor Statistics said on Friday. The U.S. has more than 2 million federal workers.
Layoffs across the U.S. spiked last month to their highest levels since 2020, led by firings of federal workers ordered by Elon Musk’s Department of Government Efficiency, or DOGE, outplacement firm Challenger, Gray & Christmas said on Thursday.
Employers cut more than 172,000 jobs last month, a 245% increase from January and double the number announced during the same month a year ago, the company said. That marks the highest monthly number of layoffs since July 2020, when nearly 263,000 cuts were announced, the firm added.
What the experts say
The slightly weaker-than-expected February jobs report could prompt the Federal Reserve to resume cutting its benchmark rate, noted Lindsay Rosner, head of multi sector fixed income investing at Goldman Sachs Asset Management.
The Fed in January hit the brakes on interest rate cuts, citing persistent inflation. But Fed Chair Jerome Powell has signaled the central bank is closely watching the labor market for signs of weakness, which could prompt additional rate cuts.
Currently, only about 1 in 10 economists polled by FactSet expect the Fed to cut rates at its next meeting on March 19. About half of those polled are forecasting a rate cut at the Fed’s subsequent meeting, scheduled for May 7.
“The payrolls growth surprised slightly to the downside and the unemployment rate ticked up justifying the momentum that’s been building for a resumption in the Fed’s cutting cycle,” Rosner noted.