The U.S. Economy Lost 92,000 Jobs In February

Key Takeaways

• U.S. employers shed 92,000 jobs in February, making it the worst month for job creation since October.
• The downturn came as a surprise to economists, who had expected it to add 50,000 jobs and maintain momentum after a surge in January.

The job market was supposed to stabilize in February. Instead, it took a nosedive.

February was the worst month for the job market since October, as employers unexpectedly shed 92,000 jobs and the unemployment rate rose to 4.4% from 4.3% in January, the Bureau of Labor Statistics said Friday.

The job losses and rise in unemployment came as a surprise to forecasters, who had called for a gain of 50,000 jobs and the unemployment rate to stay flat, according to a survey of economists by Dow Jones Newswires and The Wall Street Journal.

The report was highly anticipated as a barometer of whether the job market was stabilizing after recent slump, or whether the slowdown was continuing. 2025 was the slowest year for job creation outside of a recession in more than 20 years. A surprise upturn in job creation in January raised hopes that the market was looking up, but the loss of jobs in February was a clear signal that the job market is still losing steam.

“While January’s jobs report raised hopes that the labor market might be turning a corner, the February report swings that discussion in the opposite direction, pointing instead to continued evidence of softening and emerging warning signs across several industries,” Cory Stahle, economist at job site Indeed, wrote in a commentary.

What This Means For The Economy

The downturn in the job market signals overall weakness in the economy and could encourage officials at the Federal Reserve to lower the central bank’s key interest rate to encourage borrowing and spending and boost hiring.

Details of the report only underscored that message. The previous two months were downwardly revised by a combined 69,000 jobs, turning December’s gain of 48,000 jobs into a loss of 17,000. The economy has now lost jobs in five of the last nine months.

Related Education

What Is Unemployment? Causes, Types, and Measurement

Nonfarm Payroll: What It Means and Why It’s Important

The statistics were dented by a nurses’ strike in New York, which helped push down health care employment by 28,000 in February, after the sector had been the brightest spot in the labor market, adding 77,000 positions in January.

The job downturn could be significant for borrowing costs. The loss of jobs puts pressure on Federal Reserve officials to cut interest rates to encourage borrowing and spending and prevent a sharp increase in unemployment.

Fed officials are widely expected to keep rates steady at their next meeting later this month, but traders moved up their bets on when the next rate cut will take place. The chances of a rate cut in June rose to 36% from 30% Thursday, according to the CME Group’s FedWatch tool, which forecasts rate movements based on fed funds futures trading data.

“This is going to make it harder for the Fed to sell the labor market stabilization narrative that’s been used to justify patience on further rate cuts,” Elyse Ausenbaugh, head of investment strategy at J.P. Morgan Wealth Management, wrote in a commentary.

Rate cuts are still far from guaranteed, however, since the Fed is also under pressure to keep interest rates higher for longer to push down inflation.

The rise in energy costs because of the Iran war is adding to the inflation pressure and raising the risks of the economy entering a period of stagnant economic growth, combined with high inflation known as “stagflation.”

On top of that, the latest court rulings against President Donald Trump’s tariffs, and his imposition of a new sweeping import tax have led to a fresh wave of uncertainty about trade policy, possibly weighing on the economy.

“Add higher oil prices given conflict in the Middle East and renewed tariff uncertainty to the convoluted jobs market story, and you have a tricky, stagflationary mix of risks in the backdrop for the Fed,” Ausenbaugh wrote.

Update, March 6, 2026—This article has been updated with commentary from economists and discussion of the implications for the Federal Reserve’s interest rate policy.

Do you have a news tip for Investopedia reporters? Please email us at

[email protected]