February 2025 NFP Preview
An uncertain environment (DOGE and layoff related) argues for downside risk
The first “clean” month of jobs data under Trump’s second term will be revealing, but likely won’t capture the full impact of the federal workforce retooling. However, the lingering uncertainty of Trump’s policy mix (DOGE and tariffs) likely resulted in less job growth as corporations take a cautious approach. In our view, the cons (lower retail sales, government hiring freezes, and unintended consequences etc.) holding back this NFP report outweigh the pros (weather related bounce back). The issue is a lot is priced into the market, raising the bar for how weak this employment report needs to be for it to notice. The focus should be more on the U/R rate vs the headline NFP print.
