The US labor market lost 92,000 jobs in February in warning sign for economy

The U.S. labor market lost 92,000 jobs in February in a striking loss signaling the economy’s vulnerability after a tough month for health care industry jobs, which have been propping up the labor market.

The unemployment rate ticked up to 4.4 percent, according to new data from the Bureau of Labor Statistics.

Forecasters had predicted that employers added 50,000 jobs last month. But health care strikes, including by 31,000 workers at Kaiser Permanente in

California and Hawaii, as well as job losses in February across a broad swath of industries resulted in the second largest decline in monthly job creation since the pandemic. December jobs gains were also revised down, showing the labor market lost 17,000 positions that month.

Some economists had predicted that the sluggish labor market was on the verge of a rebound, but February’s data dimmed those prospects.

“This is definitely a sign that the labor market is not reaccelerating,” said Andrew Flowers, chief economist at Appcast, a recruitment advertising firm. “But it is just one month of data and so I don’t want to catastrophize over one month.”

The February job losses could influence Federal Reserve policymakers when they meet later this month to consider changing interest rates. The Fed will also have to weigh the potential for energy-driven inflation as the Iran conflict has halted the flow of some crucial oil and gas supplies.

The three major stock exchanges fell Friday morning following the release of the dour jobs report. The S&P 500 was trading down by 1 percent at midday. Treasury yields also sank but quickly recovered as investors anticipated rising energy prices related to the Iran conflict.

For the past year, the job market has been surprisingly sturdy, even in the face of high interest rates, changing economic policy and looming uncertainty. That’s largely thanks to the booming health care sector, fueled by demand for services from an aging population. In 2025, hospitals, doctor’s offices and residential care facilities added hundreds of thousands of positions, helping make up for losses in manufacturing, transportation and white-collar professions such as advertising and computer science.

But economists have long warned that having nearly all job growth concentrated in one sector is risky for the economy, especially if health care takes a hit.

The decline in health care positions in February appears directly related to labor strikes that have concluded and should not persist into future months.

The Trump administration downplayed February’s job losses. Labor Secretary Lori Chavez-DeRemer tried to assuage concerns about the gloomy report, attributing February’s job losses to “record-breaking strikes and bad weather” in a statement.

“There are several positive signs for our economy that continue to show American workers are recovering from the mess left behind by Biden,” Chavez-DeRemer added.

Average hourly wage growth remained solid in February, rising 3.8 percent over the past year to $37.32 an hour.

But the share of people either working or searching for work, known as the labor force participation rate, fell to its lowest level since 2021, to 62 percent.
A variety of factors have been dampening employers’ hiring plans, including uncertainty related to trade policy, artificial intelligence and the availability of immigrant workers, among other geopolitical factors. Plus, in February, winters storms weighed on job creation.

President Donald Trump announced a new global import tax in February after the Supreme Court determined that the president had exceeded his authority by imposing trade barriers on goods from around the world, pushing businesses into renewed uncertainty about their plans.

Beyond the cuts in health care, which shed 28,000 positions in February, job losses hit blue-collar and white-collar industries alike. The information sector, which includes tech and media, shed 11,000 positions. Professional and business services and the federal government also lost jobs.

Meanwhile, employment in transportation and warehousing, construction, and leisure and hospitality also fell. Manufacturing, which the Trump administration had said its trade war would revive, lost 12,000 positions.

Employers’ reluctance to hire was on display in the Federal Reserve’s beige book released this week, a collection of anecdotes about the state of the economy that emphasized solid staffing levels but weak hiring, in part due to muted consumer demand tied to rising prices.

Guy Berger, a senior fellow at the Burning Glass Institute, a labor market research nonprofit, cautioned against reading too much into February’s weak report – or even January’s strong gains of 126,000 jobs.

“I think people overreacted with excitement last month. I would caution them not to overreact with the opposite sentiment,” Berger said. “I think these reports kind of cancel each other out and the reality is pretty mildly pessimistic.”

Separately, layoffs remain low. The number of Americans filing new unemployment claims was unchanged last week, according to a separate report released by the Labor Department on Thursday. And layoffs fell sharply in February with U.S. employers announcing roughly 48,000 layoffs, 55 percent less than January, according to according to a report released Thursday by outplacement firm Challenger, Gray & Christmas.

There are some signs that the hiring could accelerate this year. Consumer spending, driven by the wealthy, remains elevated. And worker productivity is strong. Companies are also expecting to benefit from lower tax rates and deregulation, which could boost hiring plans, though a rapidly widening conflict in the Middle East is stoking inflation fears. A surge in energy prices could mean that the Federal Reserve leaves interest rates unchanged.

Joe Brusuelas, chief economist for the accounting firm RSM, said that his firm’s internal surveys show that employers are planning to make significant investments in artificial intelligence and other technology expenditures early this year, which should result in more hiring as the year progresses.
Meanwhile, the Trump administration’s aggressive immigration enforcement actions have reshaped the labor market over the past year, and fewer jobs are needed to keep the unemployment rate steady compared with previous years. Economists say that payroll growth of about 50,000 positions per month could be enough to keep the unemployment rate steady.

CORRECTION: A previous version of this article misreported the 92,000 job losses as job gains. The labor market lost 92,000 jobs in February.

Lauren Kaori Gurley | (c) 2026 , The Washington Post