Markets Breathe 'Sigh Of Relief' As February Jobs Data Shows Economy 'Not Falling Off A Cliff,' Economist Says

February's jobs report released Friday showed the U.S. economy added fewer jobs than expected, while the unemployment rate unexpectedly ticked higher. Experts are weighing in on the report.

What To Know: The U.S. economy added 151,000 jobs in February, below market expectations of 160,000, as tracked by Trading Economics. The unemployment rate ticked unexpectedly higher to 4.1%, above the 4.0% expected.

Liz Young Thomas, head of investment strategy at SoFi, said the "labor picture remains concerning." She pointed to the uptick in unemployment and a significant rise in underemployment from 7.5% to 8% in a social media post.

All in all, the labor picture remains concerning: Unemployment ticked up to 4.1%, underemployment rose significantly from 7.5% to 8.0%, and avg hours worked remained 34.1 (the lowest levels in the last two decades excluding the aftermath of recessions). pic.twitter.com/26YdKlREj3
— Liz Young Thomas (@LizThomasStrat) March 7, 2025

Not all experts were concerned, however.

Chris Zaccarelli, chief investment officer for Northlight Asset Management, said the February jobs report should provide some relief for markets roiled by the recent barrage of tariff headlines.

“Markets breathed a sigh of relief this morning that the jobs data wasn't worse than expected. It was largely in line and although the unemployment rate ticked up slightly from 4.0% to 4.1%, that's still a low number from a historical perspective."

Charlie Ripley, senior investment strategist for Allianz Investment Management, noted that although the economy is slowing, it is not "falling off a cliff."

Ripley said the Federal Reserve can continue to pause rates at current levels and observe the impacts of tariffs over the next few months.

Jamie Cox, managing partner for Harris Financial Group, expects the labor market to slow further with the government "in cutting mode." The BLS report showed federal government employment declined by 10,000 positions in February, possibly reflecting initial DOGE cuts.

"The transition from a reliance on government propping up the economy to allowing the market to stand on its own feet will be a little bumpy," Cox said.

Markets React: All three major averages were down Friday, capping a rocky week for the markets. The SPDR S&P 500 ETF Trust SPY, tracking the S&P 500, was down 0.41% at $570.36 and the Invesco QQQ Trust QQQ, tracking the Nasdaq 100 index, was down 0.61% at $485.23 at the time of publication.

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