Solid strength in the U.S. employment market continued in February, though the unemployment rate ticked higher.
Nonfarm payrolls rose 151,000 last month, the Bureau of Labor Statistics reported Friday morning. Economist forecasts had been for a gain of 160,000. January payroll growth was revised lower to 125,000 versus an originally reported 143,000.
STORY CONTINUES BELOW
The February unemployment rate was 4.1% against forecasts for 4.0% and January’s 4.0%.
Seeing major price swings (mostly to the downside) for the last couple of weeks for any number of reasons — tariff threats, stock market plunges, and the idea of a U.S. strategic reserve (no longer a rumor) — bitcoin (BTC) spiked above $90,000 in the minutes following the report before sliding slightly below the round-number level. The S&P 500 was also ticked a bit higher pre-market, while the 10-year U.S. Treasury bond yield dropped 3 basis points to 4.24%. The U.S. Dollar Index (DXY) dipped to its weakest level since early November before grinding higher.
Due in part to the jittery macro developments of late, market participants — previously having nearly written off the chances of any more rate cuts in 2025 — had raised the odds of a Fed rate cut to nearly 50% by May and of one or more rate cuts by June to almost 90%.
Indeed, a report from Challenger on Thursday showed that U.S.-based employers announced 172,000 job cuts last month, the highest reading since July 2020, likely driven by layoffs from the Elon Musk-led Department of Government Efficiency’s (DOGE) actions. Meanwhile, the Federal Reserve Bank of Atlanta’s GDPNow model forecasts the U.S. economy to shrink 2.4% in the first quarter of 2025, a stark contrast with analyst estimates of above 2% growth.
An economic slowdown, though could put the Fed in a tight spot — feeling the need to ease monetary policy to support growth even as inflation remains stubbornly perky, with the year-over-year headline rate in January at 3% and the core rate at 3.3%.
UPDATE (March 7, 13:55 UTC): Updates bitcoin, traditional markets price action following the report.