The U.S. economy unexpectedly shed jobs in February as employers pulled back to start 2026 amid economic uncertainty.
What are the main findings of the February 2026 jobs report?The Labor Department reported Wednesday that employers eliminated 92,000 jobs in February. This figure was well below the expectations of economists surveyed by LSEG, who estimated that the economy would create 59,000 jobs.
THE unemployment rate was 4.4%, slightly higher than economists’ expectations of 4.3%.
Revisions were made to the employment figures for the previous two months, with the December report being revised down by 65,000 jobs, from a gain of 48,000 to a loss of 17,000, and the January report being revised down by 4,000, from a gain of 130,000 to 126,000.
Taken together, employment in December and January was 69,000 jobs lower than previously reported.
WHY DOES THE DEPARTMENT OF LABOR REVIEW EMPLOYMENT REPORTS? HERE ARE 3 REASONSWhich sectors created or lost the most jobs in February 2026?Private sector payrolls shed 86,000 jobs in February while economists expected a gain of 65,000 jobs for the month. January’s gain of 172,000 jobs was also revised down to 146,000.
Government payroll 6,000 jobs were lost in February. Job losses in federal government (-10,000) and local governments (-1,000) were partially offset by job gains in state governments (+5,000). Federal public service employment is down 330,000, or 11%, from its peak in October 2024.
THE manufacturing sector 12,000 jobs were lost in February, well below the expectations of LSEG economists, who predicted a gain of 3,000 jobs.
Employment in the healthcare sector decreased by 28,000 jobs in February after an increase of 77,000 jobs for the sector in January. Doctors’ offices lost 37,400 jobs in February, mostly due to strikes, while hospitals added 11,600. Over the past 12 months, the health care sector has averaged a gain of 36,000 jobs per month.
Fed’s preferred inflation gauge shows consumer price growth remained elevated in December
The information sector lost 11,000 jobs in February, continuing its downward trend after an average loss of 5,000 jobs over the past 12 months.
The construction sector lost 11,000 jobs in February after recording a gain of 48,000 jobs in January.
Social assistance employers created 9,400 jobs in February, boosted by individual and family services (+12,400).
Employment in transportation and warehousing fell by 11,300 jobs. A loss among couriers and messengers (-16,600) was partially offset by an increase in air transport (+5,100). Employment in the sector is down 157,000 jobs, or 2.4%, from the February 2025 peak.
The construction sector shed 11,000 jobs in February, which could be partly due to poor weather conditions in parts of the country. (Nick Oxford/Bloomberg via Getty Images)
THE US ECONOMY GROWED SLOWER THAN EXPECTED IN THE FOURTH QUARTER
What does the February 2026 jobs report mean for the workforce?The number of long-term unemployed, defined as those who have been out of work for 27 weeks or more, was little changed at 1.9 million in February, but is up from 1.5 million a year ago. The long-term unemployed represented 25.3% of all unemployed in February.
The number of people working part-time for economic reasons fell by 477,000 to 4.4 million in February. These people would have preferred full-time employment, but were working part-time because their hours were reduced or because they were unable to find full-time employment.
The U.S. economy unexpectedly shed 92,000 jobs in February. (Joe Raedle/Getty Images)
What do experts say about the February 2026 jobs report?”There are a handful of factors that could have skewed February’s data: winter storms could explain weakness in the construction sector, for example, and nurses’ strikes could have dragged on health care,” said Elyse Ausenbaugh, chief investment strategist at JPMorgan Wealth Management.
“Nevertheless, the pace of job gains in recent months is still considerably slower than it was in 2024 and much of 2025 – this will make it more difficult for the Fed to sell the job market stabilization narrative that has been used to justify patience on further rate cuts. Add higher oil prices due to the Middle East conflict and renewed tariff uncertainty to the complex story of the job market employment, and you have a delicate, stagflationary mix of risks as a backdrop for the Fed,” Ausenbaugh added.
FED DISSENT INCREASES AS SOME OFFICIALS WEIGH RETURN TO RISING INTEREST RATES AMID HEADING INFLATION
Jeffrey Roach, chief economist at LPL Financial, said: “After lackluster employment gains in 2025, the labor market is at a standstill. 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. I don’t expect the Fed to act before June, but if the job market deteriorates faster than expected, the feds could cut rates on April 29,” Roach added.
Federal Reserve Chairman Jerome Powell and central bank policymakers will hold their next interest rate meeting on March 17-18. (Chip Somodevilla/Getty Images)
What does the February 2026 jobs report mean for the Fed and rate cuts?The latest jobs data did little to change market expectations that Federal Reserve will leave interest rates unchanged when policymakers meet on March 17-18.
The CME FedWatch tool shows a 95.5% probability that the Fed will leave the benchmark federal funds rate unchanged at its current range of 3.5% to 3.75%.
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What does the February 2026 jobs report mean for the stock market?Markets opened lower on Friday and fell further in response to data from the February jobs report, before paring some of those losses as the trading session progressed later in the morning.
After paring larger losses, the Dow Jones Industrial Average fell 1.27%, while the S&P 500 fell 1.1% and the Nasdaq Composite fell 0.92%.
