U.S. Grappling with Tech Layoffs and Bank Crisis’s Adds More Jobs with Unemployment Rising

US Nonfarm Payrolls in January rose 311,000, much higher than the expected 205,000 after the prior increase revised 504,000 increase in January (from 517,000). The February employment also brought a larger-than-expected increase in the unemployment rate, and a smaller-than-expected monthly increase in average hourly earnings, average hourly earnings rose 0.2% (consensus 0.3%) after a revised 0.3% increase in January (from 0.3%). Although the year-over-year rate increased to 4.6% from 4.4%.

Key from this report is that it was still a strong report for this point in the Fed’s tightening cycle. The market was pricing in a 50/50 chance of a larger FOMC hike ahead of the report and 64% of 25 bps afterwards. There is now the SIVB collapse causing an additional headache at the March FOMC meeting.


The average workweek fell to 34.5 hours in February from 34.7 hours in January. The unemployment rate rose to 3.6% in February from a revised 3.4% in January (from 3.4%). At 3.4% it was the unemployment rate was lower was in 1951. Private payroll company ADP reported that US jobs grew just 242,000 private payrolls in February (consensus 200,000).

February 2023 US Employment Report

The jobless rate was 3.6% in February the Labor Department reported Friday. The unemployment rate is just back over the February 2020 pre-pandemic rate of 3.5%, which was a 50-year low.

US Jobs Report

Job growth is moving away from sectors that benefited from growth drivers earlier in the pandemic toward the sectors that serve the innate desire to get back to more normal activities and have worker shortages as evidenced by high job vacancies. In nutshell layoffs are being absorbed by the job market in this rotation.

February 2023 US Employment Report and Expectations



  • Change in Nonfarm Payrolls Feb: 311K (exp 225K; prev 517K)
  • Unemployment Rate Feb: 3.6% (exp 3.4%; prev 3.4%)
  • Labour Force Participation Rate Feb: 62.5% (exp 62.4%; prev 62.4%)
  • Prior two-month net revision -34K with employment gains over reported
United States Unemployment Rate

The unemployment rate and number of unemployed persons prior to the coronavirus (COVID-19) pandemic was 3.5 percent and 5.7 million, respectively, in February 2020). The number of employed persons in the United States increased to 160,315,000 in February of 2023 from 160,138,000 in January of 2023

United States Non Farm Payrolls
United States Non-Farm Payrolls
  • Change In Private Payrolls Feb: 265K (exp 215K; prev 443K)
  • Change in Manufacturing Payrolls Feb: -4K (exp 10K; prev 19K)
  • Change in Government Payrolls Feb +46K (prev +118k)
  • Household survey Feb +177K versus Prior +894K (606k PT/2nd jobs)
  • U6 Underemployment Rate Feb: 6.8% (prev 6.6%)
  • Birth-death adjustment Feb +176K jobs
  • Long-term unemployed Feb 1.1 mil vs (prev 1.1m, 1.2m pre-pandemic)
  • The long-term unemployed fell to 17.6% in February, which is lowest share since pandemic erupted.
  • The employment-population ratio Feb 60.2% vs (prevR 60.2%, 61.2% before pandemic)


  • Average Hourly Earnings (M/M) Feb: 0.2% (exp 0.3%; prev 0.3%)
  • Average Hourly Earnings (Y/Y) Feb: 4.6% (exp 4.7%; prev 4.4%)
  • Average Weekly Hours All Employees Feb: 34.5 (est 34.6; prev 34.7)
  • Payrolls benchmark NSA revision for 2022 was in Jan 23
  • Payroll benchmark SA 2022 was in Jan 23

The market had expected the February report released Friday to show nonfarm payrolls rose 205k new jobs.  February continues the drop from an average of 439K in the first eight months of the year, as higher interest rates and prices started to weigh on the economy. Private payroll company ADP reported that US jobs grew just 242,000 private payrolls in February (consensus 200,000).

A severe labor shortage had driven up annual wage increases above 5% every month of this year until the last quarter. By contrast, wage gains averaged 3.2% in the 12 months to February 2020. Wage growth rose last month with, average hourly earnings rose by 0.2% in February from a month earlier. They were up 4.6% from a year earlier.

Employers hired across industries. Companies in certain industries that are vulnerable to interest-rate increases, such as technology and real estate, have announced layoffs. Some firms have implemented hiring freezes.


Labor force participation rate moved up from 62.4% to 62.5% prior; rate for men (orange) moved up to 68%; rate for women (purple) moved up to 57.2% (highest since pandemic started). Participation is down from 63.4% in February 2020.

Via Liz Ann Sonders @LizAnnSonders

Percentage of multiple jobholders ticked down in February to 4.9%

Via Liz Ann Sonders @LizAnnSonders

A tick up in permanent job losers, now at highest since March 2022 (but not at crisis levels) … smaller uptick in number of temporary layoffs

Via Liz Ann Sonders @LizAnnSonders

Total nonfarm employment has increased by around 22.0 million since hitting a trough in April 2020 and has returned to the pre-pandemic level. The number of unemployed persons rose by 48 thousand to 6.01 million in November, while the number of employed decreased by 138 thousand to 158.5 million. Since February 2020, government employment is down by 461 thousand, or 2.0 percent.

Employment in many sectors is now back to or surpassing pre-pandemic levels, including construction, retail, and educational services. Employment in leisure and hospitality has yet to recover despite rising by 67,000 jobs in December. @equitablegrowth
Private-sector employment continued to rise in December, while public-sector employment has recovered more slowly and remains below pre-pandemic levels. @equitablegrowth

Market Reaction

The report itself being good news for the economy is seen as mixed news for bond and stock markets, thinking it will hold any eventual pivot on rates by the Fed with its monetary policy. The report says still higher for longer with respect to the target range for the fed funds rate. However today’s markets have been overridden by the Shutdown of SVB Financial.

  • U.S. Treasuries continued adding to their gains amid ongoing uncertainty related to the potential fallout from the collapse of SVB Financials’ share price and shut down of SVB. Today’s bid comes amid a rapid downshift in rate hike expectations, briefly pressured the 10-yr yield past its 50-day moving average (3.704%) to a level not seen since mid-February.
  • Rate hike expectations: the implied likelihood of a 50-bps increase on March 22 has fallen to 42.5% from 68.3% yesterday.
  • The U.S. Dollar Index to the downside, down 1.1% to 104.13.
  • The S&P 500 futures
  • Dow +164.59 at 32419.36, Nasdaq +32.65 at 11371.00, S&P +15.48 at 3933.80
  • Despite the weight of losses from the banking sector. All three major indices climbed into positive territory.
  • The upside moves are being supported by gains in a few mega cap stocks. The Vanguard Mega Cap Growth ETF (MGK) is up 0.2% versus a 0.1% loss in the Invesco S&P 500 Equal Weight ETF (RSP).
  • Tesla (TSLA 177.72, +4.80, +2.8%), Amazon.com (AMZN 93.39, +1.17, +1.3%), Alphabet (GOOG 92.98, +0.32, +0.4%), and Apple (AAPL 150.71, +0.11, +0.1%) all show at least modest gains.

WSJ Fedwatcher Nick Timiraos on the jobs report:

Where the Jobs Were:

Job gains were widespread. In September, 5.2 percent of employed persons teleworked because of the coronavirus pandemic, down from 6.5 percent in the prior month. In May 2020, the first month these data were collected, 35.4 percent of employed persons teleworked because of the coronavirus pandemic. These data refer to employed persons who teleworked or worked at home for pay at some point in the 4 weeks preceding the survey specifically because of the pandemic.

Largest gains occurring (prior month) in:

  • Leisure/hospitality +105k (+114k)
  • Education/health services +74k (+107k)
  • Retail +50k (+34k)
  • Construction +24k (+35k)
  • Professional/bus. services +45k (+53k)
  • Durable goods 0 (-1k)
  • Financials -1k (+5k)
  • Manufacturing -4k (+13k)


Other Employment Reports

Household Survey Data  

Both the unemployment rate, at 3.6 percent, and the number of unemployed persons, at 5.9 million, edged up in February. These measures have shown little net movement since early 2022.

Among the major worker groups, the unemployment rate for Hispanics (5.3 percent) increased in February. The unemployment rates for adult men (3.3 percent), adult women (3.2 percent), teenagers (11.1 percent), Whites (3.2 percent), Blacks (5.7 percent), and Asians (3.4 percent) changed little over the month.

The number of job losers and persons who completed temporary jobs increased by 223,000 in February to 2.8 million.

The number of persons jobless less than 5 weeks increased by 343,000 to 2.3 million in February, offsetting a decrease in the prior month. The number of long-term unemployed (those jobless for 27 weeks or more), at 1.1 million, changed little in February and accounted for 17.6 percent of the total unemployed.

In February, the labor force participation rate was little changed at 62.5 percent, and the employment-population ratio held at 60.2 percent. These measures have shown little net change since early 2022 and remain below their pre-pandemic February 2020 levels (63.3 percent and 61.1 percent, respectively).

The number of persons employed part time for economic reasons, at 4.1 million, was essentially unchanged in February. These individuals, who would have preferred full-time employment, were working part time because their hours had been reduced or they were unable to find full-time jobs. The number of persons not in the labor force who currently want a job was little changed at 5.1 million in February. These individuals were not counted as unemployed because they were not actively looking for work during the 4 weeks preceding the survey or were unavailable to take a job.

Among those not in the labor force who wanted a job, the number of persons marginally attached to the labor force was little changed at 1.4 million in February. These individuals wanted and were available for work and had looked for a job sometime in the prior 12 months but had not looked for work in the 4 weeks preceding the survey. The number of discouraged workers, a subset of the marginally attached who believed that no jobs were available for them, also changed little over the month at 363,000.

Establishment Survey Data

Total nonfarm payroll employment increased by 311,000 in February, compared with the average monthly gain of 343,000 over the prior 6 months. In February, notable job gains occurred in leisure and hospitality, retail trade, government, and health care. Employment declined in information and in transportation and warehousing


Private Jobs

United States Nonfarm Payrolls - Private
  • Leisure and hospitality added 105,000 jobs in February, similar to the average monthly gain of 91,000 over the prior 6 months. Food services and drinking places added 70,000 jobs in February, and employment continued to trend up in accommodation (+14,000). Employment in leisure and hospitality is below its pre-pandemic February 2020 level by 410,000, or 2.4 percent.
  • Employment in retail trade rose by 50,000 in February, reflecting a gain in general merchandise retailers (+39,000). Retail trade employment is little changed on net over the year.
  • Employment in professional and business services continued to trend up in February (+45,000), with a gain of 12,000 in management, scientific, and technical consulting services. Employment in professional and business services had increased by an average of 35,000 per month over the prior 6 months.
  • Health care added 44,000 jobs in February, compared with the average monthly increase of 54,000 over the prior 6 months. In February, job growth occurred in hospitals (+19,000) and in nursing and residential care facilities (+14,000).
  • Construction employment grew by 24,000 in February, in line with the average monthly growth of 20,000 over the prior 6 months.
  • Employment in social assistance rose by 19,000 in February, similar to the average monthly gain of 22,000 over the prior 6 months.
  • In February, the information industry lost 25,000 jobs. Employment continued to trend down in motion picture and sound recording industries (-9,000) and in telecommunications (-3,000). Employment in information has decreased by 54,000 since November 2022.
  • Transportation and warehousing lost 22,000 jobs in February, including 9,000 in truck transportation. Employment in transportation and warehousing is down by 42,000 since October 2022.
  • Employment showed little change over the month in other major industries, including mining, quarrying, and oil and gas extraction; manufacturing; wholesale trade; financial activities; and other services.

Government Jobs 

Government employment increased by 46,000 in February, about the same as the average monthly gain of 44,000 over the prior 6 months. Employment in local government continued to trend up in February(+37,000). Overall, employment in government is below its pre-pandemic February 2020 level by 376,000, or 1.6 percent.

United States Government Payrolls

Manufacturing Jobs

Manufacturing payrolls in the United States decreased by 4,000 in February 2023, marking the first decline since April 2021 and shy of market forecasts of a 12,000 increase. In 2022, manufacturing added an average of 33,000 jobs per month.

United States Manufacturing Payrolls


In February, average hourly earnings for all employees on private nonfarm payrolls rose by 8 cents, or 0.2 percent, to $33.09. Over the past 12 months, average hourly earnings have increased by 4.6 percent. In February, average hourly earnings of private-sector production and nonsupervisory employees rose by 13 cents, or 0.5 percent, to $28.42.

 Wages Monthly

United States Average Hourly Earnings MoM

Wages Yearly

United States Average Hourly Earnings YoY

The average workweek for all employees on private nonfarm payrolls edged down by 0.1 hour to 34.5 hours in February. In manufacturing, the average workweek edged down by 0.2 hour to 40.3 hours, and overtime edged down by 0.1 hour to 3.0 hours. The average workweek for production and nonsupervisory employees on private nonfarm payrolls decreased by 0.2 hour to 33.9 hours.


United States Average Weekly Hours

The change in total nonfarm payroll employment for December was revised down by 21,000, from +260,000 to +239,000, and the change for January was revised down by 13,000, from +517,000 to +504,000. With these revisions, employment gains in December and January combined were 34,000 lower than previously reported. (Monthly revisions result from additional reports received from businesses and government agencies since the last published estimates and from the recalculation of seasonal factors.)

The Employment Situation for March is scheduled to be released on Friday, April 7, 2023, at 8:30
a.m. (ET).

Source: AFP, Challenger, DOL, TradersCommunity Data, BLS

From The TradersCommunity News Desk