- The US added 151,000 jobs in February, fewer than expected.
- Unemployment unexpectedly ticked up to 4.1% from 4%.
- The new data will be useful for the Federal Reserve to decide whether to keep interest rates steady.
The job market was just a touch cooler in February, as new job creation clocked in at 151,000, below expectations, and unemployment unexpectedly increased to 4.1%.
The job growth forecast was 159,000, and unemployment was expected to be at the same rate as January’s 4%. Unemployment has been between 4% and 4.2% since May.
Economic data like unemployment is useful for the Federal Reserve to determine what to do next with interest rates. The Federal Open Market Committee is meeting later this month, following their most recent decision to hold rates steady in January. Since then, two jobs reports and other data releases, such as reports about consumer confidence and prices, have given further insight into the economy’s performance.
“Labor market conditions have cooled from their formerly overheated state and remain solid,” Fed chair Jerome Powell said in the semiannual testimony before the Senate Committee on Banking, Housing, and Urban Affairs in February.
Based on traders’ expectations before the release, CME FedWatch showed a 91% chance the Fed decides in its meeting on March 18 and 19 to do another interest-rate hold.
The jobs report gives people insight into which sectors have had particularly strong growth and where demand is lacking. Federal government employment fell by 10,000. While many federal agencies cut jobs in February, most of those cuts will show up in next month’s report because of the timing of data collection.
Gregory Daco, EY’s chief economist, told Business Insider that the terminations of federal workers “will undoubtedly impact the March payrolls print, but we don’t know by how much.” That report will be published on the first Friday in April.
While economists have described the job market as strong recently and said the US hasn’t entered a recession, Americans are worried about the economy.
“While headline job market measures remain strong, economic anxiety is on the rise among workers as uncertainty about inflation and job security abounds,” Daniel Zhao, lead economist at Glassdoor, told Business Insider before the new jobs report was published. “The trajectory of the labor market remains highly uncertain for the rest of 2025, which is leaving workers uneasy and the picture for the overall economy murky.”
Uncertainty around a potential trade war, including retaliatory tariffs, could also affect the US economy. President Donald Trump imposed new tariffs on Mexico, Canada, and China earlier this week, although many of those were delayed until April 2 as of Thursday afternoon. The threat of tariffs could affect business planning and demand for workers.
“Steep tariff increases could cause adjustments in business decisions with knock-on effects on hiring and wages as business leaders navigate higher input costs and retaliatory measures,” Lydia Boussour, senior economist at EY, said.
This is a developing story. Please check back for updates.
