WASHINGTON, March 6 - U.S. employment gains are forecast to slow in February, with the unemployment rate widely expected to stay at 4.3%. Economists say the February jobs snapshot will likely show a steadier labor market following a rocky 2025 shaped by trade uncertainty and other disruptions.
Forecasters expect nonfarm payrolls to have increased by about 59,000 jobs last month after a 130,000 rise in January. Estimates among economists range from a loss of 9,000 jobs to a gain of 125,000 positions. Much of the anticipated pullback is attributed to a return to trend in healthcare hiring and several near-term, one-off factors that could temporarily weigh on payroll figures.
Healthcare employment surged by 82,000 jobs in January, more than double the monthly average of 33,000 recorded through 2025. Economists have linked that abnormal jump to the Bureau of Labor Statistics' birth-and-death model - the method the agency uses to estimate net job gains or losses from business openings and closures. The BLS update tied to January's employment release is estimated to have added roughly 70,000 jobs to that month’s payrolls.
Beyond statistical effects, ongoing developments could also restrain reported payroll growth in February. A strike involving 31,000 healthcare workers in California and Hawaii has the potential to reduce payroll counts in those states. Harsh winter weather is another likely drag, particularly on construction payrolls.
"Our projection of slow employment growth is not a signal of an economic slowdown, but rather it reflects anticipated one-off drags from weather slowing construction payrolls and some payback in healthcare employment," said Michael Gapen, chief economist at Morgan Stanley.
Geopolitical developments are an additional source of uncertainty. Retail gasoline prices have jumped by more than 20 cents per gallon since reported air attacks by the U.S. and Israel on Iran last weekend, according to data from the motorist advocacy group AAA. Tehran has retaliated, which analysts say has broadened a conflict that could evolve into a wider regional crisis. Economists view a prolonged war as a downside risk for the labor market through several channels.
Higher oil prices and stock market volatility tied to the conflict could hit consumer spending, particularly among higher-income households that do much of the marginal spending supporting the economy. That, in turn, could prompt businesses to become more cautious in hiring.
"We have a job market that is in solid shape, but it’s not as good as it was in 2023 and 2024," said Gus Faucher, chief economist at PNC Financial. "The war just creates additional uncertainty, businesses are already cautious, and maybe they become even more cautious. The economy is vulnerable."
Economists say the labor market picture contained in the upcoming report would reinforce views that the Federal Reserve is not under immediate pressure to resume cutting interest rates. Rising crude oil prices have raised concerns that inflationary pressures could keep the Fed in a more hawkish stance. The central bank is widely expected to hold its benchmark overnight interest rate in the 3.50% to 3.75% range at its March 17-18 meeting.
Some forecasters see a modest upside risk to the unemployment rate. While most expect it to remain at 4.3% in February, a move back to 4.4% would not necessarily be interpreted as a worrying sign. Still, policymakers and market watchers have thresholds that would increase concern. "It’s a still historically low unemployment rate, it’s right around where the Fed thinks it should be over the longer run," added Faucher. "If we see the unemployment rate start to break to the upside, get to 4.6%, then I’m starting to get a little more anxious."
Population controls and labor supply revisions
The Labor Department will incorporate updated population controls into its household survey data for January - revisions that had been delayed by last year’s 43-day government shutdown. Economists expect those new controls will show that labor supply was overestimated throughout 2025 amid a tightening of immigration enforcement.
The Census Bureau last month estimated the nation’s population rose by about 1.8 million people, or 0.5%, to 341.8 million in the year ending June 2025. BNP Paribas Securities said updated Census data, which feed into BLS estimates, suggest the BLS has been overestimating population growth since late 2024.
"Updated data from the Census Bureau, which feeds into the BLS estimates, suggest that the BLS has been overestimating population growth since late-2024," said James Egelhof, chief U.S. economist at BNP Paribas Securities. "We estimate the population aged 16-and-over will be revised down by about 590,000 in the refreshed January data, that the labor force will be revised down by about 370,000, with a similar cut to the level of household survey employment."
BNP Paribas used an experimental BLS series that smooths past population controls and incorporated the latest Census Bureau figures to reach its estimates. Using those inputs, BNP Paribas estimated the labor force grew by about 900,000 in 2025 and projected overall labor force growth of well below 500,000 in 2026.
Because the population control revisions will only be applied to January household survey data, month-to-month levels of household employment, unemployment and the labor force will not be directly comparable with prior months. However, economists note that key ratios tend to be less affected.
"The good news is that the key ratios, the unemployment rate and labor force participation rate are usually little affected," said Shruti Mishra, an economist at Bank of America Securities. "Last year, the population control added a tenth to both, and this year the risk is that the new controls skew these ratios slightly lower."
Economists project that the updated controls will show the economy needed to create fewer than 50,000 jobs per month to keep pace with growth in the working-age population.
What to watch in the report
- Nonfarm payrolls figure for February - whether it comes in near the 59,000 estimate or outside the range from -9,000 to 125,000.
- Any pullback in healthcare payrolls following January’s 82,000 increase and the influence of the birth-and-death model adjustment.
- Revisions from the new population controls and how they affect the levels of household employment and the labor force.
- Signs that geopolitical-driven energy price rises or stock market volatility are weighing on hiring or could push inflation higher.
The February employment report will be scrutinized for signs of continued labor market resilience or growing fragility. Economists contend that a small slowdown driven by identifiable one-off factors is different from a broad-based weakening, but policymakers will watch the data closely given recent geopolitical and domestic statistical developments.