US Hiring Rises At Solid Pace, Unemployment Unexpectedly Higher

US hiring remained firm in February and the unemployment rate edged higher, illustrating a labor market that's cooling gradually in the face of rising economic uncertainty.

Nonfarm payrolls increased 151,000 after a downward revision to the prior month, according to a Bureau of Labor Statistics report out Friday. The unemployment rate rose to 4.1%.

Friday's report is the latest evidence that the labor market is softening, just as President Donald Trump's policies raise concerns about the broader economy. Inflation has proven sticky in recent months and consumers are starting to pull back on spending, which, if sustained, may lead businesses to rethink their hiring plans.

Federal Reserve policymakers have indicated they would like to see more progress that inflation is sustainably easing — including in next week's consumer price index — before they resume cutting interest rates. Coupled with high uncertainty around the Trump administration's policies, officials are widely expected to keep rates steady at their meeting later this month.

US stock futures fluctuated following the release, while the dollar and Treasury yields fell.

The advance in hiring was led by health care, transportation and financial activities. Government payrolls — which have been a key driver of payrolls in recent years — climbed at the weakest pace in nearly a year, while federal payrolls were down by the most since June 2022. 

This is the first jobs report that fully reflects Trump's second term, and the administration's actions to shrink the government workforce have already contributed to the most job-cut announcements since early in the pandemic, according to separate data out Thursday. Some economists say the US could lose over half a million jobs by the end of the year because of the federal job cuts and their spillover effects to the broader economy.

Trump is also deploying tariffs in an effort to bring manufacturing jobs back to the US, and that's already incentivizing some companies like Apple Inc. and HP Inc. to consider investing more domestically. On the flip side, aluminum producer Alcoa Corp. has warned that the levies could result in 100,000 job losses.

Additionally, any efforts to restrict immigration — or send migrants home — will constrain a major source of job growth in recent years.