U.S. February Non-Farm Payrolls Unexpectedly Show "Negative Growth" Traders Increase Bets on Federal Reserve Rate Cuts

The latest non-farm payroll data from the U.S. Bureau of Labor Statistics unexpectedly decreased, and analysts believe that the slowdown in employment could force the Federal Reserve to restart rate cuts.

Specific data shows that in February, non-farm employment decreased by 92,000 jobs month-over-month, whereas the market had expected an increase of 59,000. January’s data was also revised downward from 130,000 to 126,000. The last time non-farm payrolls saw such a large decline was in October of last year, when they decreased by 140,000.

The Bureau of Labor Statistics also revised December’s non-farm job gains from an increase of 48,000 to a decrease of 17,000. After revision, the total non-farm employment increase for December and January was 69,000 fewer than previously reported.

Affected by layoffs related to artificial intelligence, employment in the U.S. information services sector continued to shrink, with a decrease of 11,000 jobs in February. Over the past 12 months, this industry has lost an average of 5,000 jobs per month.

The report also shows that the U.S. unemployment rate in February was 4.4%, whereas the market had expected it to remain steady at 4.3%. The labor force participation rate fell to 62%, below market expectations, with January’s figure revised down from 62.5% to 62.1%.

After a series of rate cuts in the second half of last year, Federal Reserve officials have adopted a cautious stance on policy making. Most central bank officials favor a wait-and-see approach, closely monitoring tariffs, Middle East conflicts, and other geopolitical factors.

Overnight, Cleveland Fed President Loretta Mester emphasized that with inflation still high and the labor market relatively stable, policy focus should be on suppressing inflation. Richmond Fed President Thomas Barkin stated that recent employment data are generally “reassuring.”

Analyst Chris Anstey said that the non-farm payroll data is likely to pressure the Fed into considering resuming rate cuts. The current situation is completely inconsistent with many officials’ previous descriptions of the economy “stabilizing.”

Just before this release, San Francisco Fed President Mary Daly admitted in an interview, “I think this precisely indicates that our previous hopes for a stable labor market may have been overly optimistic.”

“Additionally, inflation remains above target, and oil prices are rising. How long this situation will last is unknown, but both of our goals now face risks.”

(Source: Cailian Press)