A revised 229,000 jobs were added in January, according to the report, down from the 353,000 initially reported. In total, revisions showed there were 167,000 fewer jobs added in December and January than previously expected. Meanwhile, wages increased 0.1% on a monthly basis in February, slower than the 0.2% economists expected.
The downward revisions of previous months’ job gains, coupled with the lower-than-anticipated wage growth, led one economist to conclude the Fed will be less concerned that a strong labor market will drive a resurgence in inflation.
“Alongside the rise in the unemployment rate to a two-year high and a much weaker rise in wages, there is less reason now to be concerned that renewed labour market strength will drive inflation higher again,” Capital Economics chief US economist Andrew Hunter wrote in a note to clients.
Elsewhere in the report, the labor force participation rate stayed flat at 62.5%, and the average weekly hours worked increased from 34.1 to 34.3.
The largest jobs increases in Friday’s report were seen in healthcare which added 67,000 jobs in February. Meanwhile, government employment added 52,000 jobs.
On Wednesday, Federal Reserve Chair Jerome Powell described the labor market as “relatively tight” but noted that “supply and demand conditions have continued to come into better balance” during his semiannual testimony in front of lawmakers on Capitol Hill.
Markets entered Friday betting that the first Fed interest rate cut will come in June, per the CME FedWatch Tool. For the year, investors are pricing in a range of three to four rate cuts, per Bloomberg data.