In February 2025, US non-farm payrolls increased by 151,000, falling short of the anticipated 160,000. The unemployment rate rose to 4.1%, compared to the expected 4.0%.
The two-month net revision showed a decrease of 2,000 jobs. The participation rate was 62.4%, down from 62.6% in the prior month.
Wage Growth And Job Stability
Average hourly earnings remained unchanged at +0.3% month-on-month, but annual growth slowed to 4.0%, slightly below expectations. Private payrolls increased by 140,000, while full-time jobs fell by 1,193,000.
Sectoral hiring varied, with healthcare seeing the most growth at +52,000, while hospitality suffered a loss of 16,000 jobs.
What this tells us is that job growth did not meet expectations, and unemployment ticked upwards more than economists had forecast. A slower-than-expected expansion in payrolls, coupled with a marginal downward revision in previous data, suggests that labour market momentum is moderating. This ties into broader expectations for how quickly the economy is cooling.
A lower participation rate means fewer people are engaged in the workforce compared to the previous month. This can affect how unemployment figures are interpreted, as a decline in participation sometimes masks deeper weaknesses in hiring. Wage growth remained steady on a monthly basis, but the yearly figure fell slightly behind what analysts had been looking for. Earnings data is crucial in assessing inflationary pressures since higher wages contribute to consumer spending.
Sectoral Employment Trends
The breakdown between different types of employment also reveals a shift. Private payroll additions indicate continued hiring, but the sharp decline in full-time positions raises questions about job stability. Changes in full-time employment versus part-time work can influence confidence in long-term income prospects, which in turn affects broader consumer behaviour.
Different sectors experienced contrasting trends. Healthcare hiring remained robust, adding jobs at a pace that reflects consistent demand. Meanwhile, hospitality saw a pullback, potentially reflecting weaker discretionary spending. Fluctuations in sectoral job data provide insight into which areas of the economy are expanding and where headwinds might be forming.
Given these developments, the response in financial markets is likely to depend on how traders position themselves in relation to expectations around monetary policy. A labour market showing signs of cooling, though not deteriorating sharply, provides a different backdrop for rate decisions than more aggressive slowdowns. Economic data points like these shape expectations, influencing how asset prices adjust over the coming weeks.
