US February job growth expected to slow, unemployment rate projected to remain steady at 4.3%

(1) U.S. employment growth in February may slow, with non-farm payrolls expected to increase by 59,000 (compared to an increase of 130,000 in January), and the unemployment rate is expected to remain steady at 4.3%. After a significant increase in healthcare hiring in January, the sector is expected to return to normal trends, and the strike by 31,000 healthcare workers in California and Hawaii may also impact employment. (2) Economists state that the labor market is stabilizing, after previously anticipating volatility in 2025 due to uncertainties from Trump’s tariff hikes. This report will reinforce the Federal Reserve’s view that there is no rush to resume rate cuts, especially against the backdrop of potential inflationary pressures from the Middle East war. Since the U.S. and Israel launched airstrikes on Iran last weekend, retail gasoline prices have risen by more than 20 cents per gallon, which may squeeze consumers’ other spending. (3) Tehran’s retaliatory actions have led to an escalation of the war, and analysts say it is evolving into a broader regional conflict. Economists believe that a protracted war poses downside risks to the labor market, triggers stock market volatility, and may cause high-income households to reduce spending. (4) The U.S. Bureau of Labor Statistics will release new population benchmark data (delayed due to the government shutdown), which is expected to show that labor supply in 2025 was overestimated—due to the Trump administration’s strict immigration policies. Economists estimate that the population benchmark data may reduce the labor force by about 370,000 people, and imply that the number of jobs the economy needs to create each month may be less than 50,000. (5) Although the unemployment rate could possibly rise to 4.4%, economists do not see this as a worrying sign. The Federal Reserve is expected to keep rates unchanged at 3.50%-3.75% at its March 17-18 meeting. Rising crude oil prices are intensifying inflation concerns, which may prompt the Federal Reserve to maintain its hawkish stance.