The Bureau of Labor Statistics (BLS) reported the addition of 151,000 jobs in February, falling short of forecasts that anticipated 160,000 to 170,000 new positions. Revisions for December and January indicated a slight decrease of 2,000 jobs, while the unemployment rate increased from 4.0% to 4.1%.
What’s the bottom line?
Although the headline job figure was a minor miss against expectations, a closer examination of the data reveals underlying weaknesses throughout the report. This divergence is particularly noticeable between the two surveys included in the Jobs Report, which presented contrasting narratives regarding job growth.
The headline job number (+151,000) is derived from the Business Survey, predominantly based on modeling and estimations. In contrast, the Household Survey, viewed as more real-time due to its reliance on direct calls to households, reported a significant loss of 588,000 jobs. The Household Survey also indicated a loss of 1.2 million full-time positions, offset by an increase of 610,000 part-time jobs last month. Notably, the only age group to experience job gains was those aged 16-19.
Additionally, hours worked remained at a 15-year low of 34.1, reflecting cautious measures by businesses to manage costs, often by reducing employee hours.
Overall, these data points suggest a softening labor market. Given the Federal Reserve’s dual mandate of price stability and maximum employment, this report may prompt the Fed to consider rate cuts sooner if these trends persist.