Unemployment edged up slightly low despite the economy adding more jobs in February, broadly in line with expectations, according to data released Friday morning.

The U.S. unemployment rate came in at 4.1 percent for the month, according to the Bureau of Labor Statistics, having previously dropped to 4.0 percent from 4.1 percent between December and January. This came in slightly above consensus forecasts compiled by TradingEconomics (4.0 percent).

Nonfarm payrolls—the monthly count of employed individuals excluding those in agriculture, private household work, and non-profit employment—rose by 151,000 in February, compared to 143,000 in January, similar to the average monthly gain of 168,000 over the past 12 months. Analysts had penciled in a slightly healthier increase to 160,000.

Why It Matters

This reading, the first complete jobs report under the new administration, will serve as a critical benchmark for how effectively, or ineffectively, Trump’s policies influence the U.S. labor market, in particular the federal layoffs and contract cancellations being enacted by Elon Musk and the Department of Government Efficiency (DOGE).

What To Know

The unemployment rate hovered around the four-percent level during the second half of the Biden administration, reaching lows of 3.4 percent in January and April, 2023.

During Trump’s first term in office, the unemployment rate dropped from 4.6 percent in February 2017 to 3.5 percent in February 2020, before the COVID pandemic caused it to spike to a 21st-century high of 14.9 percent in April of that year.

According to Friday morning’s data, the number of unemployed individuals rose by 203,000 to 7.1 million, while employment dropped by 588,000 to 163.3 million.

In February, the employment-population ratio declined by 0.2 percentage points to 59.9 percent but remained largely unchanged from the previous year. Meanwhile, the labor force participation rate edged down to 62.4 percent from 62.6 percent in January.

The U-6 unemployment rate, which encompasses the officially unemployed, marginally attached workers, and those involuntarily working part-time due to economic conditions, rose by 0.5 percentage points to 8.0 percent.

By sector, employment trended up in health care, with 52,000 jobs added in February. Gains were also made across financial activities (21,000), transportation and warehousing (18,000), and social assistance (11,000). Federal government employment, meanwhile, declined by 10,000.

Some feared that the actions of DOGE—both direct federal workforce layoffs and the impact of cancelled government contracts on private sector employment—could weigh more heavily on Friday’s reading. However, others have suggested that these events happened too recently to register in the February data, which captures a mid-month snapshot of the economy.

On Thursday, outplacement firm Challenger, Gray & Christmas (CGC) reported that U.S.-based employers cut 172,017 in February, marking the highest total for the month since 2009. In February, the government led all sectors in cuts, with CGC tracking 62,242 announced layoffs across 17 federal agencies.

What People Are Saying

Jesse Rothstein, professor of Public Policy and Economics at the University of California, Berkeley and former chief economist at the US Department of Labor, said that the impact of DOGE cuts to the federal workforce would only begin to show up in data from March onwards, as Friday’s release contained “employment in the pay period including Feb. 12, and the firings were nearly all too late for that.”

“The March employment report…seems certain to show bigger job losses than any month ever outside of a few in 2008-9 and 2020,” Rothstein posted to Bluesky on February 19.

Prior to the release, CNBC senior economics reporter Steve Liesman said: “The bulk of government job cuts are likely too recent to show up in [Friday’s] jobs report. Workers won’t be counted as unemployed until their severance runs out.”

“Private companies announced plans to shed thousands of jobs last month, particularly in Retail and Technology,” said Andrew Challenger, Senior Vice President and workplace expert for Challenger, Gray & Christmas, on Tuesday.

“With the impact of the Department of Government Efficiency [DOGE] actions, as well as canceled Government contracts, fear of trade wars, and bankruptcies, job cuts soared in February,” he added.

What Happens Next?

Experts predict that DOGE layoffs will begin to feed more heavily into future labor market data, including the next scheduled jobs report in early April.

Analysis by investment banking advisory firm Evercore ISI, cited by Bloomberg, suggests that DOGE’s actions could result in as many as 500,000 layoffs by the end of the year.