The U.S. Bureau of Labor Statistics reported on Friday that the number of jobs in the nonfarm sector increased by 151,000, seasonally adjusted, for the month. This is better than the 125,000 in January but less than the consensus forecast of 170,000 by Dow Jones. The unemployment rate rose to 4.1%.
The report was released amid efforts by the Department of Government Efficiency, led by Elon Musk, to reduce the federal workforce, starting with buyout incentives, including mass layoffs affecting several agencies.
While the cuts are unlikely to have a significant impact for the next few months, early results are already showing. In February, the number of federal government employees decreased by 10,000, although the overall number of government jobs rose by 11,000, according to BLS data.
Many layoffs related to Musk’s initiatives through DOGE occurred after the BLS survey period, so they won’t be included in the March report. Earlier this week, Challenger, Gray & Christmas reported that over 62,000 workers were laid off due to Musk’s initiatives.
Healthcare led in job creation, adding 52,000 vacancies, which roughly matches the average for the past 12 months. Other sectors showing gains include financial services (21,000), transportation and warehousing (18,000), and social assistance (11,000). Retail trade saw a decrease of 6,000 jobs.
Regarding wages, the average hourly wage increased by 0.3%, as expected, though the annual growth of 4% was slightly less than the forecasted 4.2%.
Stock futures rose following the report, while Treasury yields dropped.
“At this point, we’re not drawing major conclusions from this jobs report,” said Byron Anderson, head of fixed-income investment at Laffer Tengler Investments. “Today’s data was, at best, ambiguous, but we still don’t have clarity on how the economy will evolve after the disruptions caused by Trump. The longer the chaos and disruptions from Trump continue, the greater the likelihood that we’ll eventually face a negative trend.”
While the report indicates continued job growth, some indicators are less positive.
The labor force participation rate fell to 62.4%, the lowest level since January 2023, as the workforce shrank by 385,000 people. A broader measure of unemployment, which includes discouraged workers and those working part-time for economic reasons, increased by half a percentage point to 8%, the highest level since October 2021.
Additionally, the household survey used by the BLS to calculate the unemployment rate showed a different picture, indicating a drop of 588,000 workers. The number of people working part-time but wanting full-time work rose to 4.9 million, an increase of 460,000.
The BLS report reflects a turbulent month for markets and the economy.
Since Trump’s presidency, stocks have fluctuated greatly, with changes largely dependent on tariff news, which quickly shifted. At the same time, Musk’s DOGE initiatives are reflected in surveys showing high levels of worker anxiety.
However, February’s data suggests labor market stability. The number of job openings in December was revised up to 323,000, 16,000 more than previously reported, while the new figure for January shows a decrease of 18,000 compared to the previous estimate.