Employers cut jobs as economy softens

US job growth stalled in February, with employers cutting 92,000 jobs, signaling unexpected weakness in the labor market.

The job losses marked a reversal from January, when the economy added 126,000 jobs. Data from the Department of Labor showed the unemployment rate rose to 4.4%, with losses spread across many sectors.

Even health care, a major driver of hiring in recent years, lost 19,000 jobs, partly due to a nurses’ strike in California that kept about 31,000 workers off payrolls.

Job losses extended to government, manufacturing, and IT.

Hiring weakens 
The weak report suggests the labor market may struggle to rebound quickly after a slow year of hiring driven by economic uncertainty. Economists had expected stronger hiring in 2026, but new revisions indicate the slowdown is broader than previously thought. 

December job figures were revised to show 17,000 jobs lost, while January hiring was also adjusted slightly lower. Combined, job growth over the past three months has essentially fallen to zero.

While some companies say AI is reducing the need for workers, analysts argue that pandemic overhiring and lower immigration are behind layoffs and slow hiring.

Despite weaker hiring, wage growth stayed solid. Average hourly earnings rose 3.8% year over year, suggesting employers are still competing for workers.

The prime-age labor participation rate dipped slightly to 83.9%. The weak report may intensify debate at the Federal Reserve ahead of its March 17–18 policy meeting, as officials weigh labor market weakness against inflation risks.