US Sheds 92,000 Jobs, Unemployment Hits 4.4% in February

The US economy shed 92,000 jobs in February, the Bureau of Labor Statistics estimated on March 6, falling well short of forecasters’ expectations, and indicating that the overall labor market remains in a low-employment environment as employers navigate inflationary pressures related to taxes, the adoption of AI, and global uncertainty.

The February estimate comes well below the BLS’s revised gain of 126,000 jobs added in January, which was much higher than the agency’s revised estimate for 2025, when U.S. employers added just 181,000 jobs for the year, or about 15,000 a month.

Over the past year, economic output has continued to grow as job gains have slowed, meaning higher productivity per worker. Thrivent Chief Financial and Investment Officer David Royal said AI may be playing a role in productivity gains, but it’s too early to say the entire difference between GDP and employment is in AI.

“I don’t think companies really understand the impact of AI on the workplace,” Royal told USA TODAY. “They are not ready to let people go but they don’t want to hire a lot of people because they are not sure that they will need them, and I think that is what makes people less employed, and more expensive.”

The unemployment rate rose to 4.4% in February, up from 4.3% in January, up from 4.1% last year. Bankrate Chief Economist Mark Hamrick noted before the report that less immigration and an aging workforce means fewer new jobs are needed to keep the economy strong.

Which industries were lost, and which sectors added jobs?

Health care, a steady engine of job growth, lost 28,000 jobs in February. That was down from a revised gain of 77,000 in January, though the dip can be explained primarily by a major strike by Kaiser Permanente workers at the time of the BLS survey.

Employment in the information sector also fell in February, with 11,000 jobs lost. The federal government cut another 10,000 jobs.

The social assistance sector was one of the few bright spots, adding 9,000 jobs in February.

Employment in other industries, including construction, manufacturing and trade, was little changed in the month, the BLS said.

Hourly wages are rising, but wage gains are uneven

Average hourly earnings for all private, nonfarm payroll workers rose 0.4% to $37.32 in February, the BLS said, adding that over the past year, hourly earnings rose 3.8%.

But, the K-shaped economy comes from wage gains, too.

While top wage growth rose to 4.2% year-over-year in February, low-wage wage growth slowed to 1.2%, and low-wage growth slowed to 0.6%, over the same period, according to the Bank of America Institute report.

One reason that wage gains are cooling for those workers may be that changing jobs now does not come with the same amount of pay that was used during the “great resignation.” People who changed jobs in January saw an increase of less than half of what job changers received in 2019, according to internal Bank of America data.

How is the overall job market?

The March 5 Challenger, Gray & Christmas report revealed that employers announced 48,307 job cuts in February, down 55% from January, and down 72% from February 2025.

Still, job seekers are struggling to find work, recent college degrees are competing with AI, and workers are holding on to their jobs for fear of not being able to find a new one.

A third of workers surveyed by MyPerfectResume, a resume platform, said they were worried about losing their job by 2026, and nearly half predicted the labor market would worsen.

Private employers announced plans to hire 12,755 workers in February, a 140% increase from 5,306 in January, according to the Challenger report. So far this year, it found, hiring plans are down 56% compared to the first two months of 2025.

Will the Fed cut rates in March?

After three cuts in the federal funds rate, which serves as a benchmark for interest rates across the country, late last year, the Federal Open Market Committee chose to pause at its last meeting in January.

Oxford Economics economists on March 4 predicted that the Fed would hold off on changing rates until it could assess the economic impact of the war with Iran, and predicted that the FOMC would cut rates twice in 2026, with the first reduction coming in June. At that time, the committee is expected to have a new chairman.

As of March 6, forecasters are predicting that the FOMC will continue to hold rates tight in the 3.5% to 3.75% range at its next two-day meeting on March 17 and 18. Before that, committee members will review February employment numbers and the BLS’ Consumer Price Index report due out on March 11.

“They’re going to focus more on inflation data than employment data. If inflation goes down, they’ll go down,” Royal said. “I don’t think they need to see a lot of weakness in employment to cut, but I do think they need to see some progress in inflation.”

This is a developing story and will be updated to add new information.

Reach Rachel Barber at [email protected] and follow her on X @rachelbarber_

This article first appeared in USA TODAY: US shed 92,000 jobs, unemployment rose to 4.4% in February.

Reporting by Rachel Barber, USA TODAY / USA TODAY

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