US Economy Unexpectedly Lost 92,000 Jobs in February

The U.S. economy unexpectedly lost jobs last month, reversing January’s better-than-expected performance, new government data released on March 6 show.

Payrolls declined by 92,000 in February from the previous month’s downwardly revised 126,000 increase, according to the Bureau of Labor Statistics.

The unemployment rate edged up to 4.4 percent from 4.3 percent.

Economists had forecast nearly 60,000 new jobs and a jobless rate holding steady at 4.3 percent.

“Well, that was ugly,” Mark Hamrick, senior economic analyst at Bankrate, said in a statement to The Epoch Times.

Average hourly earnings rose by 0.4 percent monthly and 3.8 percent year over year—higher than consensus estimates.

Social assistance was one of the few industries to record a gain, rising by 9,000.

Health care, which had been the backbone of employment gains over the past several months, lost 28,000 jobs after a spike of 77,000 in January.

Strike activity at Kaiser Permanente in California and Hawaii led to a 37,000-position drop in physicians’ offices. The situation has since been resolved, but the labor disruption occurred during the bureau’s reporting period.

This was partly offset by a 12,000-job increase in hospitals.

The information services sector was hit hard last month by layoffs linked to artificial intelligence. The industry’s payrolls fell by 11,000.

Manufacturing employment was down by 12,000, while payrolls in transportation and warehousing dropped by 11,000.

Federal government employment maintained its downward trajectory, falling by 10,000—fueled by the current administration’s efforts to trim headcount. Since peaking in October 2024, federal payrolls have fallen by 330,000.

The labor force participation rate dipped to 62 percent, the lowest since December 2021. January’s reading was sharply adjusted lower to 62.1 percent from 62.5 percent. Average weekly hours were unchanged at 34.3.

This, says Hamrick, is “a worrying sign that some workers were discouraged amid the softening seen over the past year.”

Revisions were prevalent, with the December and January numbers adjusted lower by a combined 69,000.

Full-time employment levels declined by 110,000, while part-time work fell by 249,000. The number of people working two or more jobs plummeted by 352,000 to 8.371 million.

“After lackluster job gains in 2025, the labor market is coming to a standstill,” Jeffrey Roach, chief economist at LPL Financial, said in a note emailed to The Epoch Times.

“The three-month average is 6,000 and the six-month average is negative for the fourth time in five months. Looking ahead, we should expect the unemployment rate to rise.”

Market Reaction

U.S. stocks added to their losses in pre-market trading following the February jobs report.

The leading benchmark average indexes were firmly in the red. The tech-heavy Nasdaq Composite Index declined by 1.2 percent. The blue-chip Dow Jones Industrial Average and the broader S&P 500 both fell by 1 percent.

Yields on U.S. Treasury securities were little changed, with the benchmark 10-year hovering around 4.15 percent.

The U.S. dollar index, a gauge of the greenback against a weighted basket of currencies, fell by 0.2 percent. The index has been on a tear this week, increasing by 1.5 percent as investors sought shelter during the conflict in Iran.

Expectations for interest rate cuts at this month’s policy meeting were little changed. Traders still anticipate the Federal Reserve will cut in July or September, according to the CME FedWatch Tool.

This year, monetary policymakers have been taking a wait-and-see approach to rate cuts. Minutes from the January meeting highlighted divergent views: leave rates alone to grapple with elevated inflation, or cut rates to support employment conditions.

Prior to the numbers, Federal Reserve Governor Christopher Waller expressed concern about concentration in job growth and revisions, noting that tariff-driven upside risks to inflation were minimal.

“So, the question is, why are you just sitting on your hands?” Waller said in a March 6 interview with Bloomberg Television.

The national labor market appeared to have been turning a corner amid a flurry of positive economic indicators.

Private payrolls surged by 63,000 in February. Layoffs declined by more than 70 percent year over year last month. The two Institute for Supply Management surveys showed that employment in manufacturing and services was steadily rising.

Speaking with CNBC’s “Squawk Box” shortly after the data, San Francisco Fed President Mary Daly noted that labor market statistics can be volatile.

“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,” Daly said.

“I think it just tells us that the hopes that the labor market was steadying, maybe that was too much.”

But with the conflict in Iran driving up energy prices, the Fed will now have to determine whether this will pose another roadblock to the institution’s path toward 2 percent inflation.

U.S. crude oil prices increased another 8 percent on March 6 to above $87. Additionally, the national average for a gallon of gasoline is up by about 34 cents in the past week to $3.32, according to the American Automobile Association.

“With the conflict now in motion, the economy and labor market face a new ‘geopolitics tax’ via higher financing costs, crude oil, jet fuel, gasoline, and mortgage rates,” Hamrick said.

“That’s on top of import taxes, or tariffs. The U.S. economy has been resilient, but that resilience is far from guaranteed with an adverse and uncertain policy-and-geopolitics backdrop.”