This morning’s all-important Employment Situation report from the U.S. Bureau of Labor Statistics (BLS) is out for the month of February. A headline number of +151K is below the +170K expected, but pre-market participants seem to be breathing a sigh of relief that this number is not significantly lower than estimates. DOGE layoffs, immigrant roundups, tariff initiatives and other policies of the second Trump administration were seen to potentially have a negative effect on jobs numbers. These did not come to fruition in this report.
The Unemployment Rate ticked up 10 basis points (bps), from +4.0% to +4.1%. Although officially moving in the wrong direction, this is still an historically strong number for the labor market, and as such, nobody can reasonably have a problem with this.
The previous month’s revision was downward, from +143K originally reported to +125K today. December’s exceptional +307K initially reported jobs headline was revised up to +323K this morning. The trailing 4-month average in job growth is a healthy +215K. Compare that with the previous 4-month average — the final months of the Biden administration — which was a much-weaker +111K.
Healthcare jobs led the way with +52K gains last month. Financial Services grew +21K, followed by Transportation & Warehousing at +18K. Retail lost -6K jobs for the month. Hourly wages cooled a tad to +0.3%, as expected, and gratefully lower than the inflationary +0.5% reported for January.
Labor Force Participation dropped to its lowest level since January of 2023: +62.4%, from +62.6% reported the previous month. The Average Workweek remains at a weak 34.1 hours, in-line with the prior read. The U-6 level, aka “real unemployment” shot up 50 bps month over month to +8.0%. This is the highest level since way back in October of 2021.
Thus, today’s job numbers were good on headline, but less convincing when you take a look at the details. We’ve been in a weaker period of overall jobs growth for the past two years or so, following the big run-up in the Great Reopening which followed the Covid pandemic. The question now is whether disruptions at the federal government level (to bring down spending and arrange for a new round of tax cuts) will bring employment metrics another leg lower. At this point, the answer is: no.
Pre-market trading has had a tough time digesting this news; had the lower whisper numbers come to pass, we could have easily seen another round of selling in this already brutal week for the stock market. Moments after the numbers were posted, pre-market indexes went from flat to up double-digits. Currently, however, we’re looking at -68 points on the Dow, -3 points on the S&P 500 and +1 point on the Nasdaq.
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Nonfarm Payrolls Come in Lower Than Expected
This morning’s all-important Employment Situation report from the U.S. Bureau of Labor Statistics (BLS) is out for the month of February. A headline number of +151K is below the +170K expected, but pre-market participants seem to be breathing a sigh of relief that this number is not significantly lower than estimates. DOGE layoffs, immigrant roundups, tariff initiatives and other policies of the second Trump administration were seen to potentially have a negative effect on jobs numbers. These did not come to fruition in this report.
The Unemployment Rate ticked up 10 basis points (bps), from +4.0% to +4.1%. Although officially moving in the wrong direction, this is still an historically strong number for the labor market, and as such, nobody can reasonably have a problem with this.
The previous month’s revision was downward, from +143K originally reported to +125K today. December’s exceptional +307K initially reported jobs headline was revised up to +323K this morning. The trailing 4-month average in job growth is a healthy +215K. Compare that with the previous 4-month average — the final months of the Biden administration — which was a much-weaker +111K.
Healthcare jobs led the way with +52K gains last month. Financial Services grew +21K, followed by Transportation & Warehousing at +18K. Retail lost -6K jobs for the month. Hourly wages cooled a tad to +0.3%, as expected, and gratefully lower than the inflationary +0.5% reported for January.
Labor Force Participation dropped to its lowest level since January of 2023: +62.4%, from +62.6% reported the previous month. The Average Workweek remains at a weak 34.1 hours, in-line with the prior read. The U-6 level, aka “real unemployment” shot up 50 bps month over month to +8.0%. This is the highest level since way back in October of 2021.
Thus, today’s job numbers were good on headline, but less convincing when you take a look at the details. We’ve been in a weaker period of overall jobs growth for the past two years or so, following the big run-up in the Great Reopening which followed the Covid pandemic. The question now is whether disruptions at the federal government level (to bring down spending and arrange for a new round of tax cuts) will bring employment metrics another leg lower. At this point, the answer is: no.
Pre-market trading has had a tough time digesting this news; had the lower whisper numbers come to pass, we could have easily seen another round of selling in this already brutal week for the stock market. Moments after the numbers were posted, pre-market indexes went from flat to up double-digits. Currently, however, we’re looking at -68 points on the Dow, -3 points on the S&P 500 and +1 point on the Nasdaq.