U.S. job market back in the danger zone after losing 92,000 jobs in February

February jobs report stuns economists

The U.S. economy lost about 92,000 jobs in February, the Bureau of Labor Statistics reported. Economists had expected a gain of roughly 50,000 to 60,000.

Instead, the unemployment rate ticked up to 4.4% from 4.3% in January.

A major healthcare strike, brutal winter weather, and continued federal workforce cuts all hit at the same time. It marked the third time in five months that the economy shed jobs.

Healthcare took the biggest hit

Healthcare lost about 28,000 jobs in February after gaining 77,000 in January. The BLS pointed to strike activity as the main reason.

Doctors’ offices alone lost roughly 37,000 positions, though hospitals still added about 12,000. That’s a sharp reversal for a sector that had averaged gains of 36,000 jobs per month over the past year.

The swing traced back to one of the largest healthcare walkouts in recent memory.

Kaiser Permanente strike sidelined thousands

More than 31,000 nurses and healthcare workers walked off the job on Jan. 26 at Kaiser Permanente facilities in California and Hawaii. The strike lasted about four weeks, ending on Feb. 25.

Workers, represented by the United Nurses Associations of California/Union of Health Care Professionals, raised concerns about staffing levels and wages. They accused Kaiser of walking away from talks in December.

Kaiser called the strike unnecessary and said it had offered a 21.5% wage increase over four years.

Losses spread across many sectors

Healthcare wasn’t the only sector hurting. The information sector lost 11,000 jobs, continuing a yearlong trend of monthly losses averaging about 5,000. Construction shed 11,000 after surging by 48,000 in January.

Manufacturing dropped 12,000, and transportation and warehousing fell by 11,000. Social assistance stood out as one of the few bright spots, adding about 9,000 jobs.

The breadth of the losses made February’s report especially grim.

Federal payrolls kept shrinking

Federal government employment dropped by 10,000 in February.

Since hitting a peak in October 2024, federal payrolls have fallen by about 330,000, a reduction of roughly 11%, according to the BLS. State governments added 5,000 jobs, which helped offset some of the losses.

But overall government payrolls still contracted by about 6,000. The federal cuts have been a steady drag on the jobs numbers for months now.

Severe winter storms slowed hiring

Mother Nature didn’t help. A polar vortex brought extreme cold across much of the eastern U.S. from late January into February.

A major winter storm in late January knocked out power for more than a million homes across 20-plus states.

Then a historic blizzard buried the Northeast from Feb. 22 to 24, dropping one to three feet of snow from Philadelphia to Boston.

Weather-sensitive sectors like construction likely felt the effects, though the full impact is hard to pin down.

Earlier months looked worse after revisions

The picture got even uglier when the BLS revised earlier numbers. December’s jobs figure swung from a gain of 48,000 to a loss of 17,000, a shift of 65,000.

January’s growth slipped from 130,000 to 126,000. Combined, December and January employment came in 69,000 lower than first reported.

The revisions made 2025 look weaker too, with five months of job losses during the year, the most since 2010.

Wages rose but long-term unemployment climbed

There was some good news buried in the report. Average hourly earnings rose 0.4% for the month, reaching about $37.32.

Year-over-year wage growth came in at 3.8%, slightly above forecasts.

But long-term unemployment, meaning people out of work for 27 weeks or more, reached about 1.9 million. That’s up from 1.5 million a year ago, a jump of roughly 27%.

The average time spent unemployed hit 25.7 weeks, the longest since December 2021.

Fewer Americans looked for work

The labor force participation rate slipped to 62%, its lowest since December 2021. The employment-to-population ratio edged down to 59.3%.

The household survey showed 185,000 fewer people reporting they had jobs, while the number of unemployed people rose by 203,000.

When fewer people even look for work, the unemployment rate can mask deeper problems in the job market.

Economists point to temporary drags

Not everyone hit the panic button. A Jefferies economist described the report as a “perfect storm of temporary drags” following a stronger-than-expected January.

But the Indeed Hiring Lab noted that even adjusting for the strike, payrolls would still have been deeply negative.

San Francisco Federal Reserve President Mary Daly cautioned against reading too much into one month, noting the data has been volatile.

She also flagged that inflation remains above the Fed’s target and oil prices are rising.

The Fed faces a tough call in March

The Federal Reserve meets on March 17 and 18. Markets widely expect rates to hold steady at 3.5% to 3.75%.

But if the labor market keeps weakening, some economists say the Fed could consider cutting rates as early as mid-2026. The challenge is real: the job market is cooling, but inflation hasn’t come down enough.

The Fed has to weigh both risks at the same time.

Job growth has nearly stalled in 2026

The three-month average for job growth now sits at roughly 6,000, barely above zero. The six-month average has been negative for four of the past five months.

The U.S. added only about 584,000 jobs in all of 2025, the weakest year outside of a recession since 2003.

February’s report adds to worries about where the economy is headed, especially as energy prices rise amid the conflict in Iran.

This article was created with AI assistance and human editing.

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