U.S. economy unexpectedly sheds 92,000 jobs in February
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The labor market surprisingly shed 92,000 jobs in February, while the unemployment rate was 4.4%, the government said Friday.
Why it matters: It was the worst month for payrolls since October, signaling that the labor market is on weaker footing than previously believed.
- And the data provides a bleak snapshot of that market before the Iran war and before Trump's promises to reinstate tariffs injected fresh uncertainty into the economic outlook.
By the numbers: Economists expected roughly 50,000 jobs to be added last month.
- The Bureau of Labor Statistics said job growth over the last two months was weaker than initially estimated, including a sharp revision in December.
- December was revised down from a gain of 48,000 jobs to a loss of 17,000 jobs. Gains in January were revised down by 4,000, to 126,000.
The big picture: The data defies other private sector indicators this week that showed evidence of labor market healing.
- Health care has been the dominant hiring engine of the economy. That changed last month, with the sector shedding 28,000 jobs. The Bureau of Labor Statistics said that decline reflected strike activity.
What to watch: Evidence that the labor market is on steadier footing — alongside still-high inflation — had previously dashed hopes for interest rate cuts. The report might now change those calculations.
- Kevin Warsh, who President Trump officially nominated this week to lead the Federal Reserve, has made a case for significant rate cuts that the White House has demanded over the last year.
- But in recent weeks, that looked far from guaranteed, as separate economic data showed the job market picking up momentum amid persistent price pressures.
- Another report showed that shoppers pulled back at the start of 2026: The Commerce Department said that retail sales dipped slightly by -0.2% in January, while sales were flat the previous month.
Editor's note: This story has been updated with additional details.
