The US economy lost 92,000 jobs in February and the unemployment rate rose to 4.4%

By Alicia Wallace, CNN

(CNN) — Hiring at US businesses unexpectedly plunged last month as employers shed an estimated 92,000 jobs, according to new data released Friday by the Bureau of Labor Statistics.

The unemployment rate edged higher to 4.4% from 4.3%.

Economists were expecting job growth to slow somewhat after a surprisingly strong January – in part due a major labor strike by health care workers and a deep cold snap that hit many US states. The consensus estimates were for a net gain of 60,000 jobs and the unemployment rate to hold steady, FactSet estimates show.

“We had a labor market that nearly froze last year, and it seemed to show some signs of thawing, which made it slushy at best,” Diane Swonk, chief economist at KPMG US, told CNN in an interview.

February’s report, however, showed how precarious the US jobs market is when the supporting “one-legged stool” of health care is kicked out, she said. The health care industry, which has driven the vast majority of the job gains in the past year, posted a loss of 28,000 jobs (31,000 of which were likely attributed to the mid-month Kaiser Permanente nurses and health care workers strike).

“It really illustrates how fragile the economy is on the labor market side of it,” she said. “The labor market weakness that we had seen emerge last year has not completely abated.”

And that renewed vulnerability is being exposed at a time when major shocks have emerged, heightening uncertainty. In the past three weeks alone, there has been a major trade policy twist courtesy of the US Supreme Court, a mass layoff tied to AI; and, most recently, the biggest wildcard of them all: a new war in the Middle East that’s already sent gas prices higher and threatens to undermine the progress made on inflation.

Strike and weather effects

February’s job losses marked a sharp turnabout from January’s surprisingly strong total, which economists said at the time likely overestimated hiring because of some one-time factors such as weather and lower-than-typical post-holiday layoffs. January’s job gains were revised down to 126,000 from 130,000 jobs.

December’s estimated job gains of 48,000 were revised down to a loss of 17,000 jobs.

The US economy has shed jobs in five out of the past nine months. And since May (the first month after President Donald Trump announced his biggest wave of tariffs), the labor market has lost 19,000 jobs, BLS data shows.

February’s report was expected to feature a few distortions of its own: The health care employment totals were expected to take a 31,000-job hit from the mid-month Kaiser Permanente nurses strike. (But, since that strike ended February 23, there will be a one-time boost to March’s jobs report).

Also, economists anticipated that a severe cold wave in the early part of the month could weigh on sectors such as construction and leisure and hospitality.

Friday’s report showed that most industries lost jobs. Some of the deeper declines were in health care (down 28,000 jobs); leisure and hospitality (down 27,000 jobs); and construction (down 11,000 jobs).

“There are enough caveats to the employment weakness to keep the [Federal Reserve] from jumping to the rescue with an interest rate cut next week, but there is also no escaping the fact that the labor market is not as healthy since Trump 2.0 came into office, and Washington economic officials will have to redouble their efforts,” Chris Rupkey, chief economist at FwdBonds, wrote in commentary issued Friday. “Economic growth can remain solid for a time when jobs growth slows, but it cannot continue to expand indefinitely at a satisfactory pace.”

Uncertainty – particularly about the size, scope, duration and price-hiking impacts from tariffs on imported goods – has become an albatross, freezing hiring plans in their tracks and shaking the confidence of consumers long worn down by an inflationary burst and persistent affordability pressures.

Last year’s job gains were some of the weakest in history outside of recessions.

Still, there were indications that the labor market wasn’t fully deteriorating – layoffs haven’t mounted and the unemployment rate has remained relatively low. The slowdown, economists have noted, was also a reflection of shifting demographics: The US economy doesn’t need to add as many jobs as it once did to sustain itself in part because of aging Baby Boomers and a steep pullback in immigration.

February’s headline payroll loss was shocking; however, other data points within the report underscore that the foundation beneath the labor market isn’t necessarily weakening, Nicole Bachaud, economist at ZipRecruiter, told CNN.

The number of people seeking part-time employment for economic reasons fell, as well as the number of marginally attached and discouraged workers, she said. Wage growth was stronger than expected, at a 0.4% monthly gain, lifting the annual rate to 3.8% – still above inflation.

The-CNN-Wire
™ & © 2026 Cable News Network, Inc., a Warner Bros. Discovery Company. All rights reserved.