The U.S. added 151,000 jobs last month, fewer than the 160,000 economists had projected on average but an increase from the downwardly revised 125,000 in January, according to government payrolls data. The unemployment rate unexpectedly rose to 4.1% from 4.0%.
Month-on-month wage growth of 0.3% met expectations.
Economists have been divided on whether the labor market is slowing across the board or whether recent numbers showing reduced hiring and a bigger-than-expected rise in the number of continuing unemployment claims instead reflect seasonal and one-time factors. The number of new weekly claims for jobless benefits fell more than expected.
The labor market remains in a “steady state,” Jefferies (JEF-5.54%) economists wrote in a note on Thursday. “‘No hire/no fire,’ is a difficult state for workers looking for a new job, but it is supportive of lower inflation, higher productivity, and stronger economic growth.”
That said, hiring in education, healthcare and state and local governments is likely to slow because employers are unsure about future federal funding, the firm’s Chief U.S. Economist Thomas Simons and his colleague Sam Saliba wrote. Job cuts driven by Elon Musk’s Department of Government Efficiency are yet to have much effect on the data, they said.
Employers more generally may be delaying filling job openings and slowing or postponing capital spending plans due to uncertainty over issues including President Donald Trump’s tariffs, Mai Capital Management’s Chief market strategist Christopher Grisanti told Quartz.
“The danger is that it becomes a self-fulfilling prophecy with fear of a slowdown leading to an actual slowdown,” he wrote in an email.
Some data point toward a greater labor market slowdown: U.S.-based employers said they would lay off more than 172,000 people last month, a 245% increase from January and a doubling year-on-year, according to a Challenger, Gray & Christmas report.
The outplacement firm noted that employers have announced 221,812 job cuts, the highest year-to-date total since 2009, when 428,099 cuts were planned. Anecdotally, Microsoft (MSFT-1.25%) has axed almost 2,000 workers so far this year, but claims the cuts are performance-based, Business Insider reported.
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