US employers added 151,000 jobs in February and the unemployment rate ticked up to 4.1% as hiring remained relatively steady in the first full month of jobs data from the Trump administration.
The figures came in below expectations of 160,000 jobs, but still represented an increase from January’s underwhelming 143,000 jobs amid the California wildfires and intense snowstorms. Friday’s data extended a streak of job growth to 50 months, according to the Bureau of Labor Statistics.
Analysts had expected the unemployment rate to hold still at 4%.
After initially ticking up, the S&P 500 inched down following the weaker-than-expected report’s release. The Dow and NASDAQ also moved slightly lower Friday morning.
“The Federal Reserve is likely content to stand pat on rates later this month, mindful that the risks of tariffs and other actions at the federal level bring both inflation and downside growth risks,” Mark Hamrick, senior economic analyst at Bankrate, said in a note.
“It is possible but not certain that the central bank could opt to cut rates in the coming months since officials still regard the current level as restrictive,” he added.
Federal Reserve Chair Jerome Powell on Friday hinted the central bank is unlikely to deliver President Trump his much-desired interest rate cuts anytime soon – citing uncertainty around the president’s own trade policies as cause for the delay.
The Federal Reserve has largely put interest rate cuts on hold, with Powell saying they are not looking to shift policy anytime soon.
But central bankers are on high alert for any signs of weakness in the economy that could shift that stance.
A Labor Department report released Thursday showed that continuing jobless claims — a measure of people out of work for longer periods of time — neared a three-year high in January, suggesting that job seekers are having a tougher time.
Friday’s report also gave analysts the first peek into the role that Elon Musk’s Department of Government Efficiency played in jobs last month.
Federal employment declined by 10,000 in February, according to the Bureau of Labor Statistics.
However, the report was based on surveys conducted in the second week of the month, so DOGE’s mass firings and hiring freezes across federal agencies likely won’t fully emerge until future data reports.
“Friday’s jobs report was weaker than expected, which is concerning because this report doesn’t account for the recent government job cuts from DOGE,” Glen Smith, chief investment officer at GDS Wealth Management, said in a note.
“It suggests that businesses are taking a pause on hiring until there is more certainty about tariff policy and the economic outlook,” he added.
The leisure and hospitality sector lost 16,000 jobs in February, according to the Labor Department. Bars and restaurants suffered the worst decline, shedding 27,500 positions, according to the data.
Inflation figures came in hotter than expected last month, dimming hopes for rate cuts and even stoking fears that the Fed may be tempted to raise rates.
But consumer confidence plunged in February, suffering its largest monthly decline in four years. More weakness in Friday’s report could have changed the Fed’s stubborn outlook on interest rates, but hiring remained relatively steady.
The stock market is otherwise headed for one of its worst weeks in months after suffering intense volatility after Trump’s back-and-forth on tariffs — first imposing stiff taxes on Canada and Mexico and then pausing them for 30 days for the second time — spooked investors.
“The stock market is moving in lockstep with tariff headlines, and that is likely to keep volatility very elevated for the foreseeable future, as the market does not like uncertainty,” Smith said.
Economists have warned the 25% tariffs on Canadian and Mexican goods, as well as a 20% levy on China, could reheat inflation.
During his Tuesday address to a joint session of Congress, Trump admitted that Americans will have to “bear with” him through an “adjustment period.”
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