US economy adds 275,000 jobs, unemployment rate hits 3.9%

The US economy added 275,000 nonfarm payroll jobs in February, significantly more additions than the 200,000 expected by economists, while unemployment picked up for the first time in four months.

Friday’s report also brought revisions to the January reading. After an initially expected 353,000 jobs were added, revisions showed a more modest 229,000 nonfarm payroll job additions in the month.

Meanwhile, the unemployment rate increased to 3.9% from 3.7% in January.

The jobs report adds to the data the Federal Reserve will consider before making its next interest rate decision later this month.

Here are the key numbers Wall Street will be looking at compared to the previous month, according to data from Bloomberg:

Nonfarm payrolls: 275,000 vs. +200,000 est. (+353,000 previously)
Unemployment rate: 3.9% vs 3.7% est. (3.7% previously)
Average hourly earnings, month-on-month: 0.1 vs. +0.2% est. (+0.6% previously)
Average hourly earnings, year-on-year: 4.3 vs. +4.3% est. (+4.5% previously)
Average weekly hours worked: 34.3 vs. 34.3 (34.1 previously)

On Wednesday, Federal Reserve Chair Jerome Powell described the labor market as “relatively tight” but noted that “supply and demand conditions have continued to come into better balance” during his semiannual testimony in front of lawmakers on Capitol Hill.

Markets entered Friday’s report betting that the first Fed interest rate cut will come in June, per the CME FedWatch Tool. For the year, investors are pricing in a range of three to four rate cuts, per Bloomberg data.