The U.S. Bureau of Labor Statistics reported on March 6 evening that February nonfarm payrolls dropped by 92,000, far below the consensus estimate of +58,000 and marking the first monthly decline since the pandemic. December data was revised from +48,000 to -17,000, and January from +130,000 to +126,000, totaling a downward revision of 69,000. Labor market deterioration exceeded expectations.
Federal Government Cuts 330K Jobs; Healthcare and Tech Shrink
Three factors drove the negative print: Federal government employment continued to shrink, shedding another 10,000 in February, bringing cumulative layoffs since October 2024 to 330,000 — an 11% drop linked to the Trump administration's "Department of Government Efficiency" streamlining. Healthcare lost 28,000 jobs, with physician offices shedding 37,000 due to strikes, offset by 12,000 hospital gains. Information technology lost 11,000 jobs, averaging 5,000 monthly losses over the past year as the AI-driven tech winter persists.
Wage Growth Holds at 3.8%, Stagflation Fears Rise
Despite weak employment, wages remained sticky. Average hourly earnings rose 0.4% month-over-month and 3.8% year-over-year to $37.32. The unemployment rate held at 4.4% with 7.6 million unemployed, while long-term unemployment (27+ weeks) stood at 1.9 million, up from 1.5 million a year earlier. The labor force participation rate was flat at 62.0%, and the employment-population ratio at 59.3%. The stagflation scenario — weakening jobs but sticky inflation — puts the Fed between cutting rates to support growth and holding to fight inflation.
Bitcoin Breaks Below $70K, Risk Assets Under Pressure
Risk assets faced broad pressure after the data. Per CoinGecko, Bitcoin traded around $69,978, down 3.59% in 24 hours. The downshift comes not only from the jobs report but also from escalating Middle East geopolitical risks — tensions in Iran and disruptions at the Strait of Hormuz pushing oil prices higher, squeezing global risk appetite.