February Jobs Report Commentary from MBA's Mike Fratantoni

The following is MBA SVP and Chief Economist Mike Fratantoni’s reaction to this morning’s U.S. Bureau of Labor Statistics report on employment conditions in February.

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“The job market in February softened somewhat, with the unemployment rate increasing to 4.1%, the pace of private sector job growth up a bit at 140,000, and wage growth steady at 4%. Federal government employment declined by 10,000 over the month, a number that’s likely to increase in future months, given the announced plans for reductions in force. 

“Beyond these headline numbers, there was a marked increase in broader measures of unemployment, with the U-6 increasing half a percentage point over the month, as more individuals took part-time jobs when they would prefer full-time work or were otherwise underemployed. This trend suggests that the underlying job market is somewhat weaker than the headline numbers suggest.  MBA’s forecast is for job growth to slow in 2025 relative to last year and for the unemployment rate to increase close to 4.5% by the end of the year.

“These data came in quite close to market expectations and hence should not result in much change concerning Fed policy. MBA anticipates that the Fed will keep their target rate steady through the next quarter but will likely cut one more time this year as inflation moves slowly to target and the job market softens.”