US employment unexpectedly contracts in February, unemployment rate rises to 4.4%

The US job market just posted a big negative surprise in February:

• Nonfarm payrolls growth of -92,000 (estimate: +55,000).

• An unemployment rate of 4.4% (estimate: 4.3%).

Employment growth for the prior two months was revised lower by 69,000.

The SPDR S&P 500 ETF extended losses to fall to premarket lows in the wake of this ugly print.

Event contracts showed the odds of a Fed rate cut in June jumping to around 50% in the minutes following this data, from less than 40% beforehand.

Ahead of the release, the prediction market-implied probability of the unemployment rate being 4.3% or lower was roughly 60%.

(Event contracts are offered through Robinhood Derivatives, LLC — probabilities referenced or sourced from KalshiEx LLC or ForecastEx LLC.)

Bespoke Investment Group analyst George Pearkes suggested that strikes weighed on jobs in the healthcare industry, a critical source of employment growth for the US economy in recent years, over the course of the month:

“This is about a labor market that is so soft that it cannot withstand a strike of -31k physicians in health care, because no one else is hiring,” wrote Omair Sharif, president of Inflation Insights.