February Employment Report Preview

“The poet says that April is the cruelest month, but seasonally adjusted, January is the cruelest month.” ~ Herbert Stein (as quoted in Rudd, 2024) Despite January’s lower than expected seasonally adjusted payroll gain, the overall employment report showed a much stronger labor market than expected, with hiring at the start of 2025 outpacing that of a year prior. We estimate that nonfarm payrolls rose by 180k in February (prev. 143k), with private payrolls increasing 155k. The forecast shows continued strong job growth but would bring the three-month moving average of employment gains down to 210k. Further, t he estimate reflects limited declines in federal and federal contractor hiring that occurred prior to the February survey reference week, alongside a rebound in California hiring following the January wildfire. Estimates for this month’s establishment survey are subject to increased uncertainty due to the delayed publishing of January’s state establishment data with will release on March 1 7th . We expect a marginal increase in the unemployment rate which should move to 4.1% rounded, and a largely stable labor force participation rate of 62.6%.