February Jobs Report to Show Hiring Cooldown, Steady Unemployment

Key Takeaways

• Hiring is expected to have eased in February, and economists are looking to see whether labor market strength broadens across sectors and demographic groups.
• The upcoming report will also include annual benchmark revisions to the household survey, which analysts say will likely cause a downward revision to employment levels over the last year.
• Analysts anticipate the Fed will keep interest rates in their current range.

Following a stronger-than-expected jobs report last month, analysts predict that hiring slowed in February, with the unemployment rate unchanged. While the February jobs report is expected to show a softer job market than January, economists still anticipate that overall conditions will remain better than at the end of 2025, supporting expectations that the Federal Reserve will keep interest rates steady at its March meeting.

Forecasters expect the economy added 70,000 jobs in February, down from January’s 130,000. After edging lower in January, the unemployment rate is expected to hold steady at 4.3%, according to FactSet consensus estimates. Nationwide Insurance senior economist Ben Ayers expects a slower showing on the hiring front with only 40,000 jobs added. He says that’s reflective of the current “low-hire, low-fire” economy. “I wouldn’t view this as a big step back, but certainly something more in line with what we saw toward the end of 2025 than the numbers that we saw in January.”

January Jobs Report Forecast Highlights

• Job report release date and time: Friday, March 6, at 8:30 a.m. EST
• Nonfarm payroll employment is forecast to increase by 60,000 in February versus 130,000 in January, according to FactSet.
• The unemployment rate is forecast to remain at 4.3%.

Comerica Bank chief economist Bill Adams says he will be closely tracking the annual benchmark revisions to the household survey, which are used to determine employment levels and the unemployment rate. “I think the most important new information will be how much the labor force growth has slowed over the last year,” he says.

While the revisions are likely to show a worse 2025 jobs market than previously thought, Adams remains optimistic about the hiring environment at the beginning of this year. “The business surveys have looked better since the turn of the year, which suggests hiring picked up from the weak pace of 2025,” he says.

Watching for Broadening Job Growth across Sectors, Demographics

January’s unexpectedly strong reading on hiring was largely driven by the healthcare and social assistance sectors, prompting Nationwide’s Ayers to advise caution about the overall strength of that report. He will be watching to see if hiring expands more significantly to other sectors.

Comerica’s Adams says he will be tracking whether employment levels have remained strong across demographic groups, particularly Black people and teenagers—two data points that he says are “leading indicators of broader labor market weakness.” After unemployment rates among Black people and teenagers ticked up at the end of 2025, both numbers fell in January. “I think it’s very important to watch whether that improvement is sustained in February,” he explains.

Annual Household Revisions to Show Lower Employment Over Last Year

Adams says he will be paying close attention to this year’s revision to the household survey, since it will be the first revision to reflect changes from the Trump administration’s restrictive immigration and deportation policies. He expects the revised data to show that labor force and employment levels over the last year were significantly lower than earlier estimates found. “Labor supply is growing slower because of tighter immigration policy, and labor demand also has been lackluster in the last 12 months,” he explains.

The new household data can also provide insight into what Ayers calls the “break-even” hiring rate: the number of jobs that must be added each month to maintain the current unemployment rate. Ayers says he estimates that number to be 50,000. “As we get more information, that number has shifted around. It’s really the crux of interest when it comes to the benchmark revisions,” he says.

Fed Likely to Hold Rates

Absent a significant change to the hiring and unemployment figures, Adams and Ayers both expect the central bank to maintain current interest rates. “The revisions to household employment will likely draw a lot of attention, but as long as the unemployment rate stays fairly low, I think the Fed will probably feel comfortable holding rates unchanged,” Adams says.

CME’s FedWatch tool shows more than 97% of market participants expect rates to be held at a range of 3.50%-3.75% at the Fed’s next meeting, while the remainder predicts a quarter-point cut.

While January showed a soft inflation report, wholesale prices came in much hotter than expected, which Ayers says bolsters his view. “I think that combination probably still keeps most Fed officials on the sidelines for now,” he says.