U.S. sees unexpected loss of 92,000 jobs in February; unemployment rate rises to 4.4%

The U.S. shed 92,000 jobs during February, a surprising downturn after a positive start to the year that complicates the political picture for President Trump as economic worries rise alongside the Iran war.

The Bureau of Labor Statistics said the unemployment rate rose slightly, up from 4.3% to 4.4.%.

“Employment in health care decreased, reflecting strike activity,” the report said. “Employment in information and federal government continued to trend down.”

A health care strike in California kept over 30,000 health workers off the job. Still, the report is an unexpected development. Forecasts had projected a payroll increase of 50,000.

Wall Street reacted negatively to the jobs report, which threatened to exacerbate a sell-off that began earlier in the week amid the war in Iran and soaring energy prices.

The jobs picture will complicate the calculus for the Federal Reserve, which must balance worries about lackluster hiring, which favors an interest-rate cut, with concerns about energy-driven inflation, which would argue against rate-cutting.

Construction lost 11,000 jobs, and manufacturing shed 12,000 positions in February, according to the BLS.

President Trump promised a building boom under his deregulation, tax cuts and tariff agenda. But he’s struggled to make those gains materialize so far in his second term.

“Month after month, the data shows Donald Trump’s economy is failing American families,” said Rep. Brendan Boyle, Pennsylvania Democrat and ranking member on the House Budget Committee. “The job market is weakening, costs remain high, and Trump’s illegal tariff taxes continue to hurt businesses and workers.“

Payroll had risen higher than expected in January. 

The U.S. added 130,000 jobs in the last report, far exceeding a consensus Wall Street forecast of about 55,000 positions.

BLS revised down the January number on Friday to 126,000 added jobs. Notably, the December report was revised down from a gain of 48,000 to a loss of 17,000 jobs for that month.

Employment in the federal government decreased by 10,000 in February. Federal employment is down by 330,000 positions, or 11%, since a peak in October 2024.

Mr. Trump has consistently pointed to job losses in the federal government as a positive sign, saying people are shifting into the private sector and are no longer supported by taxpayers.

However, the losses in other sectors will be tough to swallow.

“A dismal February jobs report. The U.S. economy LOST 92,000 jobs in February and the unemployment rate ticked back up to 4.4%,” Heather Long, the chief economist at the Navy Federal Credit Union, said on X. “Even healthcare shed 28,000 jobs in February.”

In a positive sign, however, wage growth remained robust at at 3.8% over the year, exceeding the 2.4% rate of inflation.