Core Viewpoint - The U.S. labor market is showing signs of slowing down, with February non-farm payrolls increasing by 151,000, falling short of the market expectation of 170,000. The unemployment rate rose to 4.1%, influenced by government layoffs and retail strikes. The company maintains a cautious outlook on the U.S. economy due to potential downward risks from tariffs and government spending cuts [1][7]. Employment Data Summary - In February, non-farm payrolls increased by 151,000, slightly below the market expectation of 170,000. The three-month moving average has decreased to 200,000 due to downward revisions of 2,000 in the previous November and December data [2]. - Government employment decreased by 10,000, while state and local government jobs increased by 21,000. Private sector job growth was mainly in education and healthcare (+73,000), transportation and warehousing (+18,000), and finance (+21,000). However, sectors like leisure and hospitality (-16,000) and temporary support services (-12,000) saw declines [2][11]. - The unemployment rate increased from 4.0% to 4.1%, with a slight rise in permanent unemployment and an increase in those re-entering the labor market. The labor force participation rate has declined, particularly among those aged 55 and older [3][9]. Future Employment Outlook - The impact of government spending cuts on employment is expected to become more apparent in the coming months, as February's non-farm report does not fully reflect the recent government layoffs that began on February 14 [4]. - In February, 62,000 federal employees were laid off, marking the highest monthly total of layoffs since the pandemic began. Approximately 75,000 federal workers accepted buyout offers, which may disrupt future government employment statistics [4][5]. - The layoffs may have a "multiplier effect," potentially affecting non-government sectors. Research indicates that for every federal employee cut, three additional jobs may be at risk [5][12]. Labor Market Competition - The need for re-employment among laid-off federal workers, many of whom are white-collar professionals, may increase competition in the labor market. The saturation of certain sectors could hinder the absorption of these workers into new roles [6]. - The U-6 unemployment rate, which includes those working part-time for economic reasons, rose to 8.0%, the highest level since 2021, indicating challenges in finding full-time employment [6]. Economic Risks - The company reiterates concerns about the U.S. economy's downward risks due to uncertainties surrounding tariffs, government spending cuts, and a high-interest-rate environment, which may dampen business and consumer confidence [7].