The U.S. job market displayed mixed signals as the Labor Department's Bureau of Labor Statistics released its report on Friday. In February, nonfarm payrolls increased by a seasonally adjusted 151,000, surpassing January's downwardly revised 125,000 but falling short of the 170,000 consensus forecast from Dow Jones. The unemployment rate edged slightly higher to 4.1%, reflecting ongoing adjustments in the labor market.
Federal government employment experienced a decline of 10,000 jobs, yet overall government payrolls increased by 11,000. This shift comes amid Elon Musk's Department of Government Efficiency's ongoing efforts to streamline federal operations through buyout incentives and mass firings. These changes have impacted multiple departments, and the effects are anticipated to become more pronounced in the coming months.
In the private sector, health care led job creation, adding 52,000 positions in February. This sector's growth aligns with its 12-month average, indicating steady demand for health care services and professionals. The broader nonfarm payroll increase suggests resilience in other areas of the economy despite the federal employment cuts.
Average hourly earnings rose by 0.3% in February, contributing to an annual increase of 4%. However, this annual growth fell short of the forecasted 4.2%, reflecting a slight deviation from expected wage inflation. These wage dynamics provide insights into the balancing act faced by employers as they navigate labor costs and economic pressures.