Job Growth Disappoints in February with 151K Payrolls; Unemployment Up

Meanwhile, the private sector showed resilience, with healthcare leading employment gains. The sector added 52,000 jobs, maintaining its strong momentum from the past year. Financial activities also expanded, adding 21,000 positions, while transportation and warehousing saw an 18,000-job increase. However, job growth in social assistance slowed to 11,000, below its 12-month average.

Retail and Part-Time Employment Raise Concerns

Retail employment remained weak, shedding 6,000 jobs, with food and beverage retailers particularly hard hit due to strike activity. Despite growth in warehouse clubs and supercenters (+10,000 jobs), the overall retail sector struggled, showing little net change over the past year.

The number of part-time workers for economic reasons surged by 460,000 to 4.9 million, signaling growing uncertainty in full-time employment opportunities. Additionally, the number of individuals outside the labor force who still want a job rose by 414,000 to 5.9 million, raising concerns about long-term labor market participation.

Wage Growth and Work Hours Remain Stable

Average hourly earnings increased by 0.3% to $35.93, marking a 4.0% rise over the past year. Private-sector production and nonsupervisory employees saw similar wage gains, with earnings up 0.3% to $30.89. However, the average workweek held steady at 34.1 hours, suggesting limited momentum for further wage-driven inflation.

Market Outlook: Labor Market Cooling Signals Economic Uncertainty

The slowdown in job creation, combined with rising unemployment and an increase in part-time workers, points to a cooling labor market. While private-sector hiring remains a stabilizing force, declining government employment and stagnant retail job growth present risks. If these trends persist, the Federal Reserve may face increased pressure to adjust monetary policy, potentially impacting interest rates and financial markets.