Markets get a small boost on February employment data

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Published Date 3/7/2025

February employment data showed less job growth that forecasts; NFP jobs thought to be +160K increased 151K, January NFP jobs revised from 143K to 125K. Private jobs in line with estimates +140K with estimates at 143K. The unemployment rate, which is based on a separate survey from the jobs figures, rose to 4.1% from 4%. Average hourly earnings month/month +0.3% down from +0.5% in January; year/year +4.0% from +3.9% in January. The labor participation rates declined to 62.4% from 62.6%. The immediate reaction pushed the 10 year note yield down 3 bps from yesterday and MBS prices up 9 bps, both unchanged from prior levels before the report.

The firings in Washington not yet visible in the data although Federal employment declined by 10K, but government payrolls increased 11K. It is highly likely in the months ahead job growth will slow down; the firings in government came too late to be included in the data this morning, the fears of economic slowing from tariffs and immigration declines should weaken employment.

The data this morning adds some credence that the Fed will cut rates soon. The employment picture is going to weaken as government firings are added to the data and businesses fearing a recession not in the mood to increase hiring. The question is, will any Fed response have an impact at the long end of the curve if it were to cut rates?

At 9:30 am ET the DJIA opened -172, NASDAQ -36, S&P -14. 10 year at 9:30 am 4.24% -4 bp. FNMA 6.0 30 year coupon at 9:30 am +16 bps from yesterday’s close and +17 bps from 9:30 am yesterday.

At 12:30 pm Jerome Powell expected to speak.

At 3 pm January consumer credit is thought to be +$5.5B down from $40.8B in December.

Source: TBWS

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