US Jobs Report Shocks with Major Loss
The US economy unexpectedly shed 92,000 jobs in February, a sharp reversal from the modest gains analysts had predicted. A major healthcare strike at Kaiser Permanente was a key factor, while the unemployment rate ticked up to 4.4%, stoking fears of broader economic headwinds.
The drop of 92,000 jobs starkly contrasted with economists' expectations of a 50,000 to 60,000 job *gain*, making the miss particularly jarring for analysts. Adding to the concern, job numbers from the prior two months were revised down by a combined 69,000, indicating the labor market was weaker at the end of 2025 than previously reported. The job losses were widespread across many sectors. Leisure and hospitality shed 27,000 positions, manufacturing cut 12,000 jobs, and the construction sector lost 11,000 workers. Federal government employment also continued to trend downward, losing another 10,000 jobs. Healthcare had been a consistent engine of job growth, adding an average of 36,000 jobs per month over the last year. Even accounting for the more than 30,000 striking workers, job growth in the sector would have been nearly stagnant, a significant shift. Despite the weak hiring picture, average hourly earnings provided a slight counterpoint, rising 0.4% for the month and 3.8% compared to the previous year. However, the overall labor force participation rate slipped to 62.0%, its lowest level since December 2021, outside of the pandemic. The number of long-term unemployed individuals (those jobless for 27 weeks or more) stood at 1.9 million, making up 25.3% of all unemployed people. Analysts do not expect this report to trigger an immediate response from the Federal Reserve. Market indicators show a greater than 95% probability that the central bank will keep interest rates unchanged at its upcoming meeting in mid-March.
