US sheds 92,000 jobs in February, surprising economists

Nick Rummell

MANHATTAN (CN) – The U.S. economy lost a whopping 92,000 jobs in February, much worse than expected, and revisions to previous jobs reports show the labor pool started to shrink last year.

Unlike the upside surprise in January’s jobs report, February’s employment report was far worse than the 50,000 jobs most economists had predicted would be added.

The unemployment rate also increased to 4.4%, a disappointment to those who predicted it would remain at 4.3%.

Revisions to the two previous jobs reports also paint a bleak picture, with the U.S. Bureau of Labor Statistics noting the estimate for December of 48,000 jobs gained actually came in at 17,000 jobs lost, while January’s jobs report was revised down by 4,000 jobs, to 126,000 positions added.

Compared to the initial estimates, the updated numbers for December and January reflect only 109,000 jobs were gained in those two months combined.

The BLS blamed strike activity for some of the decrease in health care, referencing union activity that helped cause a 28,000-job loss in the health care sector. However, the breakdown among other industries wasn’t great, with information losing 11,000 jobs, federal government shedding 10,000 jobs, and transportation and warehousing losing 11,000 jobs.

The corresponding private sector jobs report, put out earlier in the week by payroll company ADP, was much more positive, finding the U.S. economy added 63,000 jobs last month, the strongest monthly gain of private sector jobs since July 2025.

However, while that report’s headline print was certainly better than the 48,000-job forecast, it still represents a paltry gain, especially since January’s private jobs report was revised downward to just 11,000 jobs, half the 22,000 originally reported.

Worse still, the pay gap between “job stayers” and “job leavers” shrunk to 4.5% and 6.3%, respectively, the smallest gap in the survey’s history.

“We’ve seen an increase in hiring and pay gains remain solid, especially for job-stayers,” Nela Richardson, ADP’s chief economist, said in a statement. “But with hiring concentrated in only a few sectors, our data shows no widespread pay benefit from changing jobs. In fact, the pay premium for switching employers hit a record low in February.”

Small companies represented nearly all the job gains, which were centered primarily in construction and health services, while mid-sized companies with fewer than 500 employees actually lost jobs in February.

“As we entered 2026, a potential pillar for the labor market to build on was reduced uncertainty, which acted as a drag on hiring intentions from firms,” Matthew Martin, senior U.S. economist at Oxford Economics, wrote in an investor’s note.

“However, the tariff changes, geopolitical events in Venezuela, and now the war in Iran … make it more likely that uncertainty will remain a headwind throughout the year and potential reduce job growth,” he wrote.