Jobs report recap: Shocking job loss in February

Labor force participation fell to the lowest rate in over four years

The labor force participation rate fell slightly, from 62.1% in January to 62% in February, the lowest rate since December 2021. Still, Cory Stahle, an economist at the Indeed Hiring Lab, said labor force participation is still holding up but there are some issues.

"We're seeing that people are still being brought into the labor market, but they're being brought into a labor market with fewer job opportunities being created for them," Stahle said. "You're starting to get kind of this weird dynamic where you have more people wanting to work and fewer employers looking for people," Stahle said.

Stocks are tumbling as weak jobs data piles on to oil fears

US stocks dropped after the weak jobs report, with Dow futures losing more than 600 points. Markets were headed for another red day as traders weighed the labor-market picture and the latest developments in the Iran war, which have sent oil prices toward $100 a barrel.

"This is a conundrum: just when it looked like the labor market was stabilizing, this report delivers a knock-down blow to that view. It's bad news whichever way you look at it," Olu Sonola, Head of US Economics at Fitch Ratings said.

Economists and job-market experts were largely pessimistic after the huge miss

"February's jobs report takes the air out of the room following the optimistic rise in jobs in January," Daniel Zhao, Glassdoor's chief economist, said.

Sonu Varghese, chief macro strategist at Carson Group,  said the uptick in unemployment and the job loss shock is "a reminder that labor market risks haven't disappeared."

"As with any single monthly datapoint, we should avoid over‑extrapolating the trend, particularly given that severe weather and labor disruptions may have weighed on hiring," Angelo Kourkafas, senior global strategist of investment strategy at Edward Jones, said. "However, with global geopolitical uncertainty elevated, it is reasonable to expect that job growth may remain subdued in the months ahead."

The economy is in a techpocalypse

The numbers are officially in: It's a brutal time to be in tech.

While the jobs data was rough for just about every sector, the tech industry has been particularly hard hit. Economist Joey Politano wrote on X that employment across a range of tech industries has fallen by 57,000 over the past year after shedding 12,000 payrolls in February — losses that he noted are "significantly worse" than both the 2008 and 2020 recessions. That data also doesn't reflect the massive layoffs at firms like Block, suggesting that March's data could be more of the same, or worse.

According to Politano, today's tech job numbers echo an even more drastic pullback. "The only thing that compares to the scale and length of current job losses is the dot-com bust," Politano said.

Wage growth was consistent in February

Wage growth stayed modest in February, increasing 3.8% year-over-year — slightly above economists' estimates of 3.7% growth.

For workers, that means a bit more money in their pockets, even as hiring looks dreary.

It's still likely the Fed decides to hold interest rates steady at the March meeting

Despite the huge jobs report miss, Americans are likely going to have to wait for interest rate cuts.

CME FedWatch, which shows market-based probabilities of the meeting's outcome, showed a roughly 95% chance the Fed leaves rates alone, little changed from before the report. There are still inflation reports to be released before the members of the deciding committee meet.

Here's how industry gains and losses looked in February

It's still a lopsided labor market, and looked even bleaker as the healthcare sector — long a stable job-generating engine — shed payrolls over the month. A Kaiser Permanente strike of 31,000 workers affected the sector.

Even so, some sectors saw growth: Social assistance added about 9,000 jobs in February, and financial activities also added payrolls.

Meanwhile, sectors like information, which encompasses aspects of the tech industry, and the federal government also saw role reductions. That might be hard news for job seekers, especially those contending with company cuts.

December's job gain was revised away

January's job growth was revised from 130,000 to 126,000. December's estimate was revised from a gain of 48,000 to a loss of 17,000. That means there were 69,000 fewer jobs added over those two months than previously reported.

The US unexpectedly lost jobs in February

The US unexpectedly lost 92,000 jobs in February, far below the forecast of adding 55,000 new jobs. Unemployment, which was expected to hold steady, rose from 4.3% to 4.4%.

What economists expect from today's report

Economist Guy Berger said in his Substack that he thinks unemployment will be similar or higher than January's 4.3%.

"The February jobs report is likely to show positive movements in the same direction as January's blockbuster report — with jobs growing, especially in healthcare, and unemployment ticking down," Nicole Bachaud, an economist at ZipRecruiter, said. "However, the magnitude of job growth will be more modest."

Michael Linden, senior policy fellow at the Washington Center for Equitable Growth, said wage growth will be important. Average hourly earnings rose 3.7% from a year ago in January.

"During the last half of 2025, Americans enjoyed almost no real growth in their disposable income," Linden said. "And with core wholesale prices rising by more than double the expected rate in January, American families continue to feel squeezed by rising costs and limited job opportunities."

Unemployment is unevenly distributed across demographics

The overall unemployment rate was 4.3% in January, but unemployment varied by educational attainment, age, and race.

Those with less than a high school diploma continued to have the highest unemployment rate, while those with a bachelor's degree or more had a lower rate.

Younger workers have been facing higher unemployment rates over the last year as well. Unemployment for 16- to 19-year-olds increased to 13.6% in January 2026 from 11.8% a year before. Unemployment of 25- to 34-year-olds ticked up in January and stood higher than a year ago — 4.8% in January 2026 compared to 4.2% in January 2025.

Black unemployment remained higher than white and Asian unemployment. It ticked down from December to January but was a percentage point higher than a year ago — rising from 6.2% in January 2025 to 7.2% this past January.

Fewer people who want full-time jobs are working part-time

About 4.9 million people worked part time for economic reasons in January, such as their employers cutting hours because of slower sales, down from the roughly 5.5 million in November. A lot more people are working part-time for non-economic reasons, like taking care of families or going to school, with almost 23 million people in January.

"There are a lot of people working part time, but not because they have to, because they want to," Nicole Bachaud, an economist at ZipRecruiter, said. "The 'have to' piece is really important for labor market strength overall."

A survey of consumers by The Conference Board found 28% said in February jobs were "plentiful," slightly above the 26% a month prior. About 21% said they were "hard to get," slightly above the previous 19%.

Slower population growth means smaller monthly job gains may be more common

Job growth is expected to be below 100,000 in February, but that might be enough to keep up with a more slowly growing population.

Gregory Daco, EY's chief economist, told Business Insider that an aging population and a drop in net migration have resulted in a lower breakeven rate, or "the rate at which job growth creates upward or downward pressures on the unemployment."

Other economists have similarly told Business Insider that fewer jobs need to be added due to fewer people coming to the country. The Census Bureau found net international migration, or people coming from outside the US minus those leaving the US, cooled from 2.7 million between July 1, 2023, and June 30, 2024, to 1.3 million over the same period the following year. The Bureau projects that to drop further to just about 321,000 this year. It expects this decline from 2024 to 2026 due to "both a decrease in immigration and an increase in emigration."

Economists have varying estimates for the new breakeven rate. Jed Kolko, senior fellow at the Peterson Institute for International Economics, told Business Insider that the economy probably needs to create under 50,000 jobs a month to keep up with slower workforce growth. "Two years ago, that breakeven rate was closer to 170,000 jobs a month."

Diane Swonk, chief economist at KPMG, said "we may not need to generate hardly any jobs at all" — ranging from negative 20,000 to positive 50,000.

January's job growth was strong, but cracks are showing

Evan Cunningham, a former economist at the Bureau of Labor Statistics, said in a LinkedIn post that the growth in the healthcare and social assistance sector will likely be revised downward.

"It's important to note the health care super sector only created jobs on a seasonally adjusted basis," Cunningham said. "Raw unadjusted data showed employment was unchanged in January. This is extremely unusual. Health care employment typically declines in January."

Healthcare and social assistance on a seasonally adjusted basis made up 95% of the net 130,000 jobs added in January. The 130,000 gain exceeded December's 48,000 and November's 41,000. If it's revised downward and other sectors aren't revised much, it could mean January's job market was less strong than previously thought. Data about December could also be revised.

Remote work is still alive, but less prominent than a year ago

The Bureau of Labor Statistics reported that in January, more people were teleworking than in 2023, but down from 2025.

Whether you're allowed to work remotely may depend on how old your boss or company is. A new study found "employees working under younger CEOs have higher levels of" work from home, and the average cools down as CEO age increases.

Additionally, the researchers found employees work from home "almost twice as often at firms founded after 2015 than at firms founded before 1990."

Job switching may be paying off again

The wage premium for job switchers widened in January after collapsing for a majority of 2024 and 2025. That's based on data from the Federal Reserve Bank of Atlanta's wage growth tracker.

Nicole Bachaud, an economist at ZipRecruiter, said overall year-over-year wage growth outpacing inflation signals that workers still have some bargaining power.

February is expected to be cooler than January's job growth

While another good month of job growth could signal a more bullish job market in 2026, don't be too alarmed if the headline number comes in soft. A snowy February and a roughly monthlong Kaiser Permanente strike will probably be reflected in the numbers.

"Severe winter weather likely weighed on hiring in weather‑sensitive industries, including construction, leisure and hospitality, retail, and transportation," EY economists Gregory Daco and Lydia Boussour said.

"In addition, healthcare employment growth likely softened after January's outsized gains, reflecting both payback from prior strength and a notable drag from labor disruptions with roughly 31,000 healthcare workers on strike during the payroll survey period."

The next Fed meeting is coming up in a week and a half

Today's jobs report and next week's dual inflation reports will help the Federal Reserve make its next interest rate decision. Federal Open Market Committee members will meet for the second time this year on March 17 and 18. Ahead of the jobs report, CME FedWatch, which shows market-based probabilities of the meeting's outcome, showed a near-100% chance of a rate hold.

The Fed decided to hold rates steady in its first decision of 2026 in January. "Having lowered our policy rate by 75 basis points over the course of our previous three meetings, we see the current stance of monetary policy as appropriate to promote progress toward both our maximum-employment and 2% inflation goals," Federal Reserve chair Jerome Powell said.

The economy is still growing, even though jobs are stagnant

The economy grew 2.2% last year, a slower pace than recent years but still showing some strength, while the US recorded the lowest job growth outside a recession in over two decades.

"This is an unusual job market, and so you would expect something to break," Laura Ullrich, the director of economic research in North America at the Indeed Hiring Lab, said, which could mean either a pickup in hiring or layoffs.

"Consumers are feeling the weight of the price increases, and combined with the jobs outlook that's worsening they say, 'OK, when I look out, I don't see prices going down that much, but I do see my wage is not growing and my job not being as reliable or secure as it once was,'" Atsi Sheth, the chief credit officer at Moody's Ratings, told Business Insider.

Is AI behind layoffs?

Block CEO Jack Dorsey announced around the end of February that the fintech company was laying off more than 4,000 of its over 10,000 workers. Dorsey said it wasn't because "we're in trouble," but intelligence tools combined with "smaller and flatter teams" are enabling a shift.

Stephanie Aliaga, global market strategist on the JPMorgan Asset Management Market Insights Team, questioned in a December post whether we're at the start of AI-driven job losses or if this technology is "simply the new label for conventional belt-tightening."

"The emerging evidence points more to the latter," Aliaga said. "AI is touching the labor market, but so far, its impact is selective and uneven, changing how people work rather than whether they work at all."

Some employees use AI to automate tasks like crafting emails, and some solo founders have found uses for it while working on their own.

"Over time, we can expect automation, AI and further process simplification to reshape how work gets done — some roles will change, new ones will emerge and others will no longer be required," said Jane Fraser, CEO of Citi, in a January memo.

Are white-collar fields still growing?

Employment in the information sector, which includes telecommunications, publishing industries, and more, has generally been cooling. There were 2.8 million people working in this sector in January, 9% below the November 2022 peak.

Employment in financial activities was down from a year ago as of January. Employment in professional and business services has been on the rise over the past few months, but was just short of where it stood a year ago in January.

White-collar sectors aren't the only areas where it's hard to find a job opportunity. Employment in manufacturing, as well as in mining and logging, has dropped over the last couple of years.

One sector is doing especially well amid the frozen job market

Gregory Daco, the chief economist at EY, described the job market as in a "deep freeze." Hires, quits, and job openings are all a lot lower than they were a few years ago, signaling a labor force that isn't moving around a whole lot.

However, the private healthcare and social assistance sector is still thriving in the low-hire, low-fire state. Employment in this sector increased by 18% from January 2019, far surpassing the 4% growth in all other nonfarm payrolls. It's expected to keep growing as the population ages.

"Healthcare is definitely a job-producing engine that will continue to be so," Christian Gomez, a vice president at ADP, said.

Overall, private education and health services added 137,000 jobs this past January.

"It's almost like Groundhog Day," Laura Ullrich, the director of economic research in North America at the Indeed Hiring Lab, told Business Insider. "Each month, it's like whether the jobs report is a little stronger or a little weaker, the strength we are seeing is coming from that one sector."

Markets end a bumpy week dominated by Iran

At the end of a week in which market narratives have been dominated by the war in Iran and the sharp spike in oil prices it triggered, futures are pointing to a small drop in US stocks on Friday.

As of just after 6 a.m. ET, the Dow Jones, S&P 500, and the Nasdaq all look set to open between 0.2% and 0.5% lower on the day. The Dow is set to shed around 110 points at the open, adding to the precipitous drop of nearly 800 points it saw during a painful session on Thursday.

With the index heavily weighted to industrials, a 7% jump in oil prices on the day was the catalyst for the Dow's heavy losses on Thursday.

Elsewhere in markets on Friday, oil has pushed higher once again, with West Texas Intermediate up 3.7%, or $3 per barrel, to $84. Brent, the international benchmark, is 1.8% higher at $87 per barrel.

Stocks in Europe are somewhat becalmed, with both the UK's FTSE 100 benchmark and Germany's DAX almost entirely flat.

What we learned from the last jobs report

The US beat job growth expectations, adding 130,000 jobs in January, with the healthcare sector accounting for almost two-thirds of that. The report also unveiled revised data for 2025; it turns out the economy only added 181,000 jobs, way softer than the 584,000 previously reported.

That marks the lowest annual job growth since 2003, outside the deep recessions following the 2008 financial crisis and 2020 COVID-19 pandemic.

Meanwhile, the unemployment rate ticked down in January from 4.4% to 4.3%.