Nonfarm Payrolls Unexpectedly Cold. February Employment Plunges 92,000, Three Major US Stock Index Futures Collectively Fall.

TradingKey - Data released by the U.S. Department of Labor on Friday showed that non-farm payrolls unexpectedly fell by 92,000 in February, significantly missing the market expectation of a 59,000 increase. The previous figure was revised down from 130,000 to 126,000, and December's data was also sharply revised down from a 48,000 gain to a 17,000 loss. This implies that nearly half of the employment growth over the past two months has been erased.

Following the news, futures for the three major U.S. stock indices collectively moved lower, while gold and silver prices saw a temporary rally.

The Mag 7 faced downward pressure in pre-market trading, with Nvidia falling nearly 2%, Apple down nearly 0.8%, Microsoft sliding over 1%, Tesla down over 1%, Amazon falling 1.5%, Google down over 1.5%, and Meta down over 1.3%.

Private-sector employment decreased by 86,000, a stark contrast to the expected increase of 65,000. Within this, factory employment fell by 12,000, compared to an anticipated gain of 3,000. Government payrolls also declined by 6,000. Average hourly earnings grew 0.4% month-on-month, slightly higher than the 0.3% estimate. This indicates that while the labor market is cooling in volume, wage pressures have not yet eased.

The non-farm payroll report was a major disappointment across the board. The sharp miss in job growth, combined with resilient wages, has pushed the Federal Reserve into a dilemma: the rapid cooling of the labor market warrants a policy response, but geopolitical uncertainty in the Middle East could fuel inflationary risks, limiting the room for easing. The market will reprice the timing and magnitude of rate cuts.

The disappointing data has sparked market concerns about whether the U.S. is facing economic stagnation, with investors still adopting a 'sell first, evaluate later' trading approach.