February’s jobs report came in somewhat weaker than expected, but the exclusion of a recent massive slew of layoffs by the federal government complicates the overall labor picture, say some asset managers.
Lindsay Rosner, head of multi sector fixed income investing at Goldman Sachs Asset Management, said the data “wasn't as bad as feared,” adding that since the unemployment rate ticked up that would justify the “momentum that's been building for a resumption in the Fed's cutting cycle.”
GSAM has $2.8 trillion in assets under supervision.
However, Glen Smith, chief investment officer at GDS Wealth Management, with $1.2 billion in assets under management, called the jobs report “weaker than expected,” and added that it is “concerning because this report doesn't account for the recent federal government job cuts from the Department of Government Efficiency, also known as DOGE.
“It suggests that businesses are taking a pause on hiring until there is more certainty about tariff policy and the economic outlook,” Smith noted.
Lara Castleton, U.S. head of portfolio construction and strategy at Janus Henderson, cautioned that the DOGE cuts will not start to materialize until the March jobs report is released next month. “There’s no clear sign to take from this print and the path ahead will be muddy,” she said.
Janus Henderson has $378.7 billion AUM.
Bryce Doty, senior vice president and senior portfolio manager at Sit Investment Associates, noted the jobs report only cited 10,000 job losses in the federal government in February, meaning many of the DOGE cuts will not appear until the March jobs reading.
“The impact from DOGE cuts will impact future jobs reports more than today’s report,” he said. “Even then, the economic impact won’t be felt for some time as the employees collect severance and unemployment compensation for a while.” Sit Investment has $16.9 billion in AUM.
Josh Jamner, director and senior investment strategy analyst at ClearBridge Investments, also noted that the latest jobs data did not include some layoff announcements, thereby raising “fears of what could come next.”
The U.S. economy created 151,000 jobs in February, above January’s downwardly revised figure of 143,000 and below economists’ expectations, the U.S. Bureau of Labor Statistics reported on March 7. The unemployment rate edged up to 4.1% from 4% in the prior month. Economists had expected an increase of 160,000 jobs in February and a jobless rate of 4%, according to a survey by FactSet Research Systems, a financial data firm.
The Bureau also noted some revisions to payroll figures from the past two months: The December figure was revised upward by 16,000 to 323,000, while the January data was revised downward by 18,000 to 125,000. With these revisions, employment in December and January combined was 2,000 lower than previously reported.
