U.S. February Non-Farm Payrolls Surprise with a Decrease of 92,000 People, BTC Falls Below $70,000

U.S. Bureau of Labor Statistics (BLS) latest data shows that non-farm employment unexpectedly decreased by 92,000 in February, marking the first decline in recent years, with the unemployment rate remaining at 4.4%.
(Background: Non-farm payrolls exceeded expectations! U.S. ADP employment surged by 63,000 in February, indicating a warming labor market, but investors remain cautious.)
(Additional context: The Bank of Japan has a 60% chance of raising interest rates in April! Will the oil price surge due to the Iran conflict lead to a repeat of the August stock market crash?)

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• Federal government layoffs of 330,000
• Wage growth remains at 3.8%, increasing stagflation risks
• BTC drops below $70,000, risk assets under pressure

The U.S. Bureau of Labor Statistics (BLS) released the February employment report on March 6 (Taipei time), showing non-farm payrolls (NFP) unexpectedly decreased by 92,000, far below market expectations of an increase of about 58,000, and marking the first monthly net decline since the pandemic began.

At the same time, December data was significantly revised downward from the initial +48,000 to -17,000, and January data was adjusted from +130,000 to +126,000, a total downward revision of 69,000. The deterioration in the U.S. labor market exceeded expectations.

Federal government layoffs of 330,000

There are three main reasons believed to explain the shift to negative non-farm payrolls:

First, federal employment continues to decline. In February, federal jobs decreased by another 10,000. Since reaching a peak in October 2024, total layoffs have reached 330,000, a decline of 11%. This is directly related to the Trump administration’s ongoing “Government Efficiency Office” (DOGE) reform plan, with federal employee numbers decreasing at the fastest rate in decades.

Second, healthcare jobs declined due to strikes. In February, healthcare employment decreased by 28,000, with 37,000 positions lost in physician clinics due to strikes, offsetting the 12,000 new hospital jobs.

Third, the tech industry continued to shrink, losing 11,000 jobs in February. Over the past year, an average of 5,000 tech jobs have been lost each month. With AI booming, the tech winter persists.

Wage growth remains at 3.8%, stagflation risks increase

Ironically, despite such weak employment data, wage growth in the U.S. did not slow down. In February, average hourly wages increased by 0.4% month-over-month and 3.8% year-over-year, reaching $37.32. This indicates that although the labor market is shrinking in quantity, wages remain rigid.

This is the scenario the market fears most: employment weakens but inflation does not decline. The Federal Reserve (Fed) finds itself caught between “cutting rates to support the economy” and “not cutting rates for fear of inflation,” leaving it in a dilemma.

The unemployment rate in February held steady at 4.4%, with about 7.6 million unemployed. Long-term unemployed (over 27 weeks) remained at 1.9 million, significantly higher than the 1.5 million a year ago. The labor force participation rate stayed at 62.0%, and the employment-population ratio was 59.3%, with no significant changes.

BTC drops below $70,000, risk assets under pressure

Following the employment data release, risk assets came under broad pressure.

According to real-time data from CoinGecko, Bitcoin (BTC) is trading around $69,978, down 3.59% in 24 hours. The downward pressure in the crypto market is driven not only by the employment data itself but also by geopolitical risks in the Middle East. Tensions with Iran persist, and the Strait of Hormuz traffic disruptions have pushed oil prices higher. Global risk appetite has sharply contracted, but the crypto market has not yet been significantly affected in the short term.