The U.S. economy lost 92,000 nonfarm jobs in February, marking a major reversal of fortunes for the labor market and almost erasing all of the job gains delivered a month earlier, data from the U.S. Department of Labor showed Friday.
The numbers came in well below economists’ expectations and marked a significant drop-off from 130,000 jobs added in the previous month. The unemployment rate ticked up from 4.3% in January to 4.4% in February, the BLS said. Unemployment remains low by historical standards, ABC News reported.
Employment is part of the Federal Reserve’s dual mandate, which directs the Fed to use monetary policy to achieve two main economic goals: maximum employment and stable prices that targets 2% inflation.
According to The Hill, the February report showed the nation’s labor market was rapidly losing steam last month, defying the expectations of experts. Economists had expected the U.S. to have gained about 60,000 jobs last month.
Job growth was widely expected to slow after much of the U.S. was battered by winter storms last month, following an unseasonably warm January. A surge in the number of striking workers was also likely to take a chunk out of February job gains.
BLS Revises Previous Reports
But the steep drop could be a concerning sign amid rising concerns about the economic impact of the war in Iran, which is fueling a surge in oil prices, The Hill noted.
The BLS also issued revisions to previous jobs reports, bringing the total number of jobs gained since December down by 69,000.
San Francisco Federal Reserve President Mary Daly said Friday on CNBC that the weak February jobs report adds to a difficult policymaking environment for the central bank.
In her CNBC interview, Daly did not commit to a position on interest rates but noted that a softening labor market combined with inflation still running above the Fed’s 2% target complicate future decisions. Daly doesn’t have a vote this year but will again next year.
“This jobs market report has got my attention,” she said during a “Squawk Box” interview. “I don’t think you can look through this report, but I also don’t think you should make more of it than one month of data.”
The BLS revised December’s initially reported gain of 48,000 jobs to a loss of 17,000 jobs and cut down the 130,000-job gain initially reported in January to 126,000, The Hill reported.
The healthcare sector, long the fastest and steadiest growing industry for employment, lost workers in February, largely because of strikes in California and Hawaii. The Hill noted that job losses were widespread throughout the economy, however.
Some Sectors Barely Changed
The Hill reported that the information sector lost 11,000 jobs in February as the rise of AI and a reversal of the post-COVID tech hiring frenzy continued to reduce employment in the industry. Federal government employment fell by 10,000 jobs and is down 330,000 since October 2024.
Employment barely changed in the mining, construction, manufacturing, financial and retail sectors, and the social assistance sector gained 9,000 jobs, The Hill reported.
The U.S. suffered its worst nonrecession year of job growth in 2025, averaging roughly 50,000 new jobs per month during Trump’s first term. Inflation also ended the year little changed after rising and falling amid the uncertainty driven by the president’s trade agenda.
With concerns rising about the labor market, the Fed cut its benchmark interest rate three times in the latter part of 2025, and it has taken a more cautious approach since then with inflation still above target and threatened by the Iran war, CNBC noted.
“It’s a very different universe than when we have inflation below our target,” Daly told CNBC, referencing the cuts in 2019 when prices were tame. “But right now we have inflation printing above target. It’s been printing above target for some time, so it’s really a balance of risks calculation, and I hope the 75 basis points we did last year would put a floor underneath the labor market.”
First American Senior Economist Sam Williamson said the report may impact the central bank’s near-term outlook.
“Despite the downside surprise, the report is unlikely to materially alter the Federal Reserve’s near term policy outlook. The unemployment rate—the Fed’s preferred measure of labor market slack—remains within ranges typically associated with full employment, while inflation continues to run well above the Fed’s 2% target,” Williamson said. “Against that backdrop, the balance of risks remains tilted toward patience rather than urgency, though softer labor market data could still surface in the form of dissents from more dovish policymakers at the March Federal Open Market Committee meeting.”
