Despite President Donald Trump’s efforts to cut the federal workforce, employment growth was weaker than expected, but still stable.
Non-farm pay is better than the downward revision of 125,000 in January, but it rose to a seasonally adjusted 151,000 times better than the 170,000 consensus forecast from Dow Jones reported on Friday by the Labor Bureau of Labor Statistics. The unemployment rate rose to 4.1%.
The report comes amid efforts to cut the federal government in Elon Musk’s government’s efficiency efforts, starting with buyout incentives and including mass shootings that affected multiple sectors.
The decline will not be fully felt until the coming months, but efforts are beginning to show. Government salaries overall increased by 11,000, but federal employment fell by 10,000 in February, BLS said.
Many of the DOGE-related layoffs occurred after the BLS investigation reporting period. This means that it will not include the March report. Outplacement Challenger, Gray, reported earlier this week that they announced a layoff under the mask effort.
Healthcare led the way in job creation, adding 52,000 jobs, along the average 12-month average. Other sectors that post profits include financial activities (21,000), transportation and warehouses (18,000), and social assistance (11,000). Retailers recorded a decline of 6,000 workers.
In wages, as expected, average hourly revenues rose 0.3%, but the 4% annual increase was a little softer than the 4.2% forecast.
Stock market futures were higher following the report, but the Treasury yields were lower.
“At this point, we don’t have much stock in our employment reports,” said Byron Anderson, head of bonds at Laffer Tengler Investments. “The data today was mixed at best, but we haven’t yet made clear what economy will drive Trump’s chaos forward. The longer the chaos and chaos from Trump, the more likely the data trend will ultimately be negative.”
The report showed that employment growth would continue, but some details were a little less positive.
Workforce participation rate fell to 62.4%, the lowest level since January 2023, as the labor force fell 385,000. The broader measure of unemployment rate, including discouraged workers and workers who hold part-time positions for financial reasons, jumped to half the point to 8%, the highest level since October 2021.
The household survey that BLS uses to calculate unemployment rates also spoke differently, showing an incursion of 588,000 workers. The number of people who work part-time but want a full-time position has risen to 4.9 million, an increase of 460,000.
The BLS report tracks the tumultuous months of market and economy.
Since Trump took office, stocks have been turning every day, and movements rely largely on rapidly changing tariff news. At the same time, Musk’s efforts through Doge are reflected in a survey showing high levels of worker anxiety.
However, the February figures show that the labor market is stable. Employment numbers in December were revised up to 323,000, an increase of 16,000, while the new January figures represent a 18,000 decrease from previous estimates.
