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A slowdown in the labor market last summer prompted the Federal Reserve to resume its rate-cutting campaign. And while the central bank is now on pause as it waits to see the impact of three consecutive rate cuts on the economy, Wall Street is watching the February jobs report for hints on when the central bank could start lowering interest rates again.
Job growth sizzled to start the year, with the U.S. adding 130,000 new jobs in January — more than double what economists expected — while the unemployment rate edged down to 4.3%.
The Bureau of Labor Statistics will release the next jobs report at 8:30 am Eastern Standard Time on Friday, March 5. Economists expect the U.S. to have added 50,000 new jobs in February and the unemployment rate to remain at 4.3%.
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January “was the strongest monthly gain in nine months, and runs counter to the recent narrative of a weak labor market,” writes David Payne, staff economist and reporter for The Kiplinger Letter, in the Kiplinger jobs outlook. And a second straight decline in the unemployment rate “added to the surprise.”
But Payne says “there are reasons to think that the January report may be more of a blip than a turnaround.” For one, most of the gains came in health care and social assistance, while government, transportation and hospitality saw declines.
For another, “labor market data during the winter months are less reliable than at other times of the year, simply because seasonal shifts in hiring can be strong in winter.”
ADP jobs report comes in stronger than expected
On Wednesday morning, ADP said that private payrolls rose by 63,000 in February, more than the 48,000 jobs economists expected and the best month for job gains since July 2025.
“This increase could be a positive indicator for Friday’s release of the nonfarm payroll number, although ADP revised employment growth downward on net, going back to October of 2025 by 159,000 fewer jobs,” says Eugenio J. Alemán, Ph.D., chief economist, and Giampiero Fuentes, economist at Raymond James.
We looked at some of what economists, strategists and other experts around Wall Street expect for the February jobs report and what the results could mean for the Fed and investors going forward. You’ll find these outlooks, edited at times for brevity, below.
What to expect in the February jobs report
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“Last month’s employment report delivered an unexpected upside surprise, even though the underlying details pointed to a labor market that is gradually losing momentum, reinforcing the mixed signals we continue to see across labor‑market indicators. At the same time, recent history has shown that initial BLS estimates can be materially revised. As we approach this week’s release, these factors heighten the importance of monitoring not just the headline print but also the revision pattern itself. In a data environment where top‑line strength can mask cooler underlying dynamics — and where subsequent revisions frequently alter the story — the durability of labor‑market momentum may only become clear once the full set of adjustments is in hand.” – Shari Hensrud, Chief Investment Officer at MissionSquare
“We forecast a below-consensus February nonfarm payrolls print of 35,000. We have marked down our prior 65,000 NFP forecast following Friday’s CES Strike Report, which showed a major strike at Kaiser Permanente during the February survey week. The unemployment rate should remain at 4.3%, with some risk of rising to 4.4%.” – Shruti Mishra, U.S. Economist at BofA Securities
“We expect the February employment report to show that January’s robust pace of job growth overstated underlying momentum in the labor market. While some stabilization in labor demand is evident, a range of indicators, including JOLTS and consumers’ perception of job availability, continue to point to a gradual loosening in labor market conditions rather than a renewed acceleration in hiring.” – Wells Fargo economists
“We estimate that nonfarm payroll employment rose just 25,000 in February, substantially slower than the gain in January. The slowdown would be driven by a partial unwinding of January’s surprising upswing in the birth-death adjustment for the health care and social services industry, which accounted for nearly all of the prior month’s job gain. Likewise, we expect private nonfarm payroll employment to have also increased 25,000 in February, slower than the gains seen in both December and January.” – Marc Giannoni, Chief U.S. Economist at Deutsche Bank
“Annual benchmark revisions to the household survey will likely draw headlines. This monthly survey covers about 60,000 households, just a sliver of the country’s 275 million people over age 16. Once a year, the BLS incorporates detailed population data from the Census Bureau to re-weight responses to the survey based on demographic characteristics like sex, age, race, national origin, and so forth. These ‘population control’ revisions include data on immigration and so will almost certainly revise down the levels of the labor force, employment, and unemployment. The most important output of these revisions for the Fed is whether they meaningfully adjust the unemployment rate. If the unemployment rate is largely unchanged, the Fed is still very likely to hold rates steady at their next decision on March 18.” – Bill Adams, Chief Economist for Comerica Bank