US Job Growth Fell Dramatically in February

U.S. employers reported losing 92,000 jobs in February, according to the latest employment report from the U.S. Bureau of Labor Statistics (BLS) — a stunning loss and well below expectations. The unemployment rate ticked up to 4.4%.

“Outside of October’s government shutdown, the longest in history, this is the largest monthly job loss since 2020,” said Nicole Bachaud, labor economist at ZipRecruiter.

Downward revisions to December and January employment totals lowered the U.S. job count by an additional 69,000, leaving the December figure at -17,000 jobs. U.S. job growth has now gone negative in three of the past six months.

Ger Doyle, regional president, North America at ManpowerGroup, said that the report “fell significantly short of projections and indicates that employers were far more restrained in their hiring plans.”

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ManpowerGroup’s real-time data “points to a labor market that is trying to find a more balanced rhythm after last year’s slowdown,” he said. “Open job postings remain softer than a year ago, yet new postings are holding relatively steady, which shows that employers are being deliberate about the roles they bring to market.”

Glassdoor Chief Economist Daniel Zhao called the latest job growth picture “stagnant.” He added that “The last two months have already seen severe winter weather, government shutdowns, and strikes, which all muddy the job market picture, but overall point to 2026 repeating 2025’s theme of uncertainty.”

Health care, the primary growth driver in employment for the last two years, saw a loss of 28,000 jobs due largely to a strike at Kaiser Permanente that affected more than 30,000 workers in Hawaii and California.

“The shocking decline in employment in February was surely affected by the health care strike, and government job cuts as well,” said Andrew Flowers, chief economist at Appcast. “But looking at private employment excluding health care still shows a decline of 58,000. So, it’s not just a health care strike effect.”

Tuan Nguyen, economist at RSM US, agreed, saying that weakness was broad-based, with almost all sectors performing worse than they did in January. “We think the unusually cold weather in February was a big factor in keeping hiring down,” he said. “That means we should see a rebound in job gains in March as the strike ends and the weather becomes more accommodating.”

Amy Glaser, senior vice president at Adecco, said that she also sees February’s loss of jobs as a temporary disruption driven by strike activity and severe winter weather conditions.

“Notably, we’re continuing to see a ‘low-hire, low-fire’ environment where employers are prioritizing retention — reflected in wage growth of 3.8 percent year over year,” she said.

The ongoing conflict in the Middle East did not affect the latest jobs data, but higher energy prices and supply uncertainty could soon impact business confidence and hiring plans.

Federal Reserve officials consequently have taken a cautious approach to policymaking following a series of interest rate reductions. The latest jobs numbers raise expectations that the Fed may cut rates.

The slowing labor market is in part due to the cautious approach to hiring that many businesses have adopted to combat uncertainty about tariffs and immigration policy. Expectations that artificial intelligence could reduce staffing needs might have further cut into hiring plans.

“Despite healthy levels of unemployment, the labor market remains weak as employers await more certainty about long-term business conditions and their own financial abilities to onboard additional personnel,” said Noah Yosif, chief economist and head of research at the American Staffing Association. “These trends are not severe enough to warrant expedited accommodation from the Federal Reserve but will force the committee to delicately balance future decisions between both ends of its dual mandate.”

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The health care sector reported its first net job loss in nearly a year. “This is a bit of a mirage, though,” Zhao explained, as the 31,000 striking Kaiser Permanente workers will return to payrolls in the March report, “meaning that February’s job gains in health care would have been 3,000 without the effects of the strike.”

That’s still a down month for health care. “Without health care’s boost, there’s nothing to outweigh private payroll losses in other sectors,” he said.

Flowers said that there was weakness across the board, with declines in manufacturing (-12,000), construction (-11,000), leisure and hospitality (-27,000), professional services (-5,000), and transportation and warehousing (-11,000). “Really only financial activities (10,000) and meager gains in retail (2,000) were notable positives,” he said.

While health care’s February decline was due to work stoppages, severe weather dampened construction hiring, Yosif said. “Job creation in trade-exposed services are also weighing on total payroll growth due to concerns about future tariff policies,” he said.

Doyle noted that ManpowerGroup data show that retail continues to show momentum, with increased demand for frontline supervisors and store management roles.

“At the same time, professional and business services remain subdued, and openings in several white-collar categories have eased,” he said. “The overall picture is of a labor market that remains cautious, with employers adding roles where they must and waiting for clearer economic signals before broadening their hiring plans.”

The technology sector — being disrupted by AI — lost 11,000 jobs in February as part of a 12-month trend in which tech companies lost an average of 5,000 jobs per month.

Federal government employment also fell by 15,000 jobs for the month, excluding the U.S. Postal Service. The White House’s efforts to cut down federal payrolls have resulted in a decrease of 330,000 jobs, or 11% of the total workforce, since October 2024.

Nguyen said that a big concern is not about the overall number of jobs in the U.S., but the structural shift in the composition of employment characterized by more health care, and less technology and professional services roles in the AI era.

“Taking out health care jobs, the U.S. has actually been running a job deficit rather than a surplus over the past 12 months,” he said. “And this problem won’t be solved easily.”

Unemployment Rises

While the unemployment rate has drifted higher since 2023, it remains low by historical standards. A broader measure of unemployment that includes discouraged workers and those holding part-time positions for economic reasons dipped to 7.9%. Long-term unemployment also rose, with the average duration of unemployment at 25.7 weeks, the longest since December 2021.

“The unemployment rate ticked up, reflecting the broad-based job losses,” Bachaud said. “The decline could be driven by renewed uncertainty around tariffs following recent court challenges, as well as rising geopolitical tensions.”

The BLS report also included an annual update to population figures, revealing that the population is lower than previously reported, reflecting the sharp drop in the flow of immigrants into the U.S.

“With the latest population estimate updates, the baseline labor force participation and employment-to-population ratios were revised lower,” Flowers said. “The labor force is now noticeably older, in part due to lower immigration; as a consequence, participation notches lower.”

The labor force participation rate edged down to 62%. “Outside of the COVID pandemic and its immediate recovery period, this is the lowest level since the 1970s,” Bachaud said.