Federal Reserve Bank of San Francisco President Mary Daly expressed concern Friday that February's weak employment report challenges assumptions about US labor market stability. Speaking on CNBC, Daly noted that unexpected job losses of 92,000 and a rising unemployment rate to 4.4% suggest the labor market may be weaker than previously thought.

Daly cautioned against overreacting to a single month's data, acknowledging that winter weather and healthcare strikes contributed to the disappointing numbers. However, she emphasized that policymakers must remain vigilant about labor market conditions, particularly given inflation's persistence above the Fed's 2% target for five years. The central bank faces risks on both sides of its mandate.

The Fed kept interest rates unchanged in January and is expected to hold steady at its upcoming meeting. Daly has maintained concerns about labor market weakness since last summer, underscoring the ongoing challenge of balancing employment stability with price control in monetary policy decisions.