WASHINGTON: American employers unexpectedly cut 92,000 jobs last month, a sign that the labor market remains under strain. The unemployment rate blipped up to 4.4%.
Hiring deteriorated from January, when companies, nonprofits and government agencies added a healthy 126,000 jobs, the Labor Department reported Friday. Economists had expected 60,000 new jobs in February.
Revisions also cut 69,000 jobs from December and January payrolls.
The surprisingly weak employment picture in February adds to the economic uncertainty over the war with Iran, which has caused oil prices to surge and saddled business and consumers with unforeseen costs.
“The job market is struggling in the face of so many headwinds,” said Heather Long, chief economist at Navy Federal Credit Union. “Companies are going to be even more reluctant to hire this spring until the war ends and they can see consumers still spending. It’s a tense time for the U.S. economy.”
The job market had been expected to rebound this year from a lackluster 2025 when it was buffeted by President Donald Trump’s erratic tariff policies, his purge of the federal workforce and the lingering effects of high interest rates. In 2025, employers added just 15,000 jobs a month. Hopes for a 2026 rebound rose after January hiring came in above expectations.
“Just when it looked like the labor market was stabilizing, this report delivers a knock-down blow to that view,” said Olu Sonola, head of U.S. economics at Fitch Ratings. “It’s bad news whichever way you look at it.” The job losses were widespread.
Construction companies cut 11,000 jobs last month, which likely reflects frigid weather. And healthcare firms shed 20,000 jobs after a four-week strike by more than 30,000 nurses and other front-line workers at Kaiser Permanente in California and Hawaii. Healthcare has been one of the job market’s strong points.
Factories cut 12,000 jobs and have now lost jobs for 14 of the last 15 months. Restaurants and bars lost nearly 30,000 jobs. Administrative and support services firms cut nearly 19,000 jobs and courier and messenger services almost 17,000.
Financial firms added 10,000 jobs, though jobs cut continue to hit that sector as well this year.
Average hourly wages rose 0.4% from January and 3.8% from a year earlier.
The outlook for the job market — and the entire economy — is clouded by the war with Iran.
The combination of weak hiring and increasing inflationary pressures arising from the war creates a nightmare for the Federal Reserve, which must decide whether to cut interest rates to help the job market or hold off to help keep a lid on prices. “This is probably the worst scenario for monetary policy,” said Eugenio Aleman, chief economist at Raymond James.
Employers were reluctant to hire last year because of uncertainty over Trump’s tariffs — and the unpredictable way he rolled them out.
