The US economy shed 92,000 jobs in February in a sharp slide that eroded most of the gains of the previous month and fuelled concerns over the strength of the labour market.
Wednesday’s figure from the Bureau of Labor Statistics (BLS) was well short of the 55,000 gain expected by economists polled by Bloomberg and a stark reversal from January’s unexpectedly strong tally of 126,000 new jobs.
The unemployment rate bounced back to 4.4 per cent following a decline the previous month.
The bleak data undermines hopes that the US labour market had begun to recover after a sluggish 2025 in which average monthly job gains were just 10,000, the weakest level outside a recession in more than two decades.
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“The idea the labour market has turned a corner implodes with this report,” said Samuel Tombs, chief US economist at Pantheon Macroeconomics.
The fall was led by a drop in healthcare employment following widespread strikes by medical workers in New York, California and Hawaii. Tech employment also slid, while job cuts in the federal government continued.
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Underlining the extent of the malaise, hiring in the previous two months was revised sharply lower by a combined 69,000.
Economists said the figures pointed to the underlying fragility of the US labour market. “This is about a labour market that is so soft that it cannot withstand a strike of 31,000 physicians in healthcare, because no one else is hiring,” said Omair Sharif at Inflation Insights.
Treasury yields dropped immediately following the report but the market moves reversed shortly after. The two-year yield, which is highly sensitive to interest rates, was down just 0.01 percentage points to 3.59 per cent.
In the futures market, interest rate expectations were lower, with traders still betting on one or two cuts this year, but with the first to happen not until September. It had been expected to come in July before the data release.
The weak February report comes as President Donald Trump looks to convince sceptical voters that his economic policies are working for them ahead of November’s midterm elections.
Kevin Hassett, director of the White House’s National Economic Council, said the latest jobs numbers came as “something of a surprise” but downplayed their significance.
“If you take the average over a few months, we had a surprisingly positive one last month and a surprisingly negative one this one,” he added. “But on average, it’s about what we expect to be seeing because immigration has gone down by so much.”
The report also underscores the difficult balancing act the Federal Reserve faces in supporting the labour market while restraining price pressures. US inflation fell more than expected to 2.4 per cent in January, but the surge in oil prices caused by the war in the Middle East threatens to stoke increases in the cost of consumer goods.
“This is startlingly weak data, and the job losses happened across sectors,” said Eric Winograd, director of developed market economic research at AllianceBernstein.
“I don’t think it is enough to push the Fed into action in March, especially given what is happening with oil prices,” he added. “But you get another one of these and the Fed will move.”
Fed chair Jerome Powell has indicated that most members of the central bank’s rate-setting committee are in no rush to lower interest rates further in the near term after cutting three times last year. But the latest data release is likely to further complicate the decision at their next meeting later this month.
Some economists cautioned against reading too much into the report, however, noting that the data was somewhat distorted by the BLS’s modelling and that other economic indicators remained healthy.
“The payroll employment data are just lousy,” said Nancy Lazar at Piper Sandler. “You have to look at a package of labour market data, not just the payroll employment report.”
“Unemployment claims below 215 [thousand] are incredibly healthy [and with] what’s going on with the manufacturing . . . what’s going on with the service sector, it’s difficult to get bearish on the labour market.” - Copyright The Financial Times Limited 2026
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