The US economy shed 92,000 jobs in February 2026, delivering a sharp blow to hopes of labour market recovery as the unemployment rate climbed to 4.4 per cent.
Figures released by the Labor Department earlier today represented a dramatic reversal from January’s solid gain of 126,000 jobs.
Forecasters had anticipated the creation of approximately 60,000 new roles, making the actual outcome a substantial disappointment.
Jonathan Raymond, investment manager at Quilter Cheviot, “The US jobs market has taken a big tumble, with total nonfarm p”ayrolls dropping by 92,000 a hugely disappointing outcome compared to expectations of a 50,000-60,000 uplift.
The US economy lost 92,000 jobs in February despite Donald Trump’s overhaul of the economy
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The weak data compounds existing economic pressures stemming from the conflict with Iran, which has driven oil prices sharply higher.
Job losses spread across multiple sectors last month, with the healthcare industry cutting 28,000 positions following a four-week strike by more than 30,000 nurses and frontline staff at Kaiser Permanente facilities in California and Hawaii.
Restaurants and bars eliminated nearly 30,000 roles, while manufacturing shed 12,000 workers, extending a run of losses in 14 of the past 15 months.
Construction firms reduced headcount by 11,000, likely reflecting severe winter weather conditions. The federal government continued its workforce reduction, eliminating 10,000 positions in February.
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The price of Brent Crude Oil has increased massively since the Iran conflict | RAC FOUNDATIONDavid Goebel, investment strategist at Evelyn Partners, noted this brings total federal job cuts to 330,000, representing an 11 per cent reduction since October 2024.
Administrative and support services lost nearly 19,000 jobs, with courier and messenger services shedding almost 17,000.
Despite the grim figures, many firms appear reluctant to make redundancies, instead adopting a cautious approach of neither expanding nor contracting their workforce.
Private sector payrolls contracted by 86,000, a figure Mr Goebel described as “the worst since the Covid pandemic in 202..” The picture worsened further with downward revisions stripping 69,000 jobs from December and January’s previously reported totals.
Smoke can be seen rising above Tehran after the US-Israeli strikes | GETTYHourly earnings provided a modest bright spot, rising 0.4 per cent month-on-month against expectations of 0.3 per cent, with annual wage growth reaching 3.8 per cent.
Oil prices reached their highest level since hostilities began earlier today, with disruption to shipping through the Strait of Hormuz threatening sustained energy cost increases.
Mr Raymond suggested the Fed’s near-term path “looks relatively set in stone,” with mixed signals and Iranian conflict uncertainty pointing toward a continued pause on rate adjustments.
US Treasury bonds rallied following the employment data as investors increased bets on faster rate cuts, though Goebel noted the report “pushes that story in the opposite direction” from inflation concerns driven by elevated oil prices.
