The February 2026 jobs report delivered a stark disappointment, revealing a surprising loss of 92,000 nonfarm payroll positions—far below economists’ expectations—while the unemployment rate climbed to 4.4%, exceeding the forecasted 4.3%.
Downward revisions to prior months, widespread sector weakness (notably in health care, manufacturing, financial activities, construction, and government), and lingering impacts from strikes, winter weather, and federal downsizing painted a picture of a cooling labor market amid ongoing economic uncertainties.
Payroll figures for the previous two months were downwardly revised. December shifted from a gain of 48,000 jobs to a loss of 17,000, a reduction of 65,000. January dropped from an increase of 130,000 to 126,000, down 4,000. Combined, December and January employment stood 69,000 lower than prior estimates.
Manufacturing shed 12,000 jobs, missing forecasts for a 3,000-job gain.
Financial activities continued to contract. The sector lost 22,000 jobs in January and trails its May 2025 peak by 49,000 positions. Insurance carriers and related activities dropped 11,000 jobs over the month.
Health care employment fell by 28,000 in February after adding 77,000 the prior month. Physicians’ offices cut 37,000 jobs, mainly from strike activity, while hospitals gained 12,000. The sector averaged 36,000 monthly gains over the past year.
Construction firms reduced 11,000 jobs, likely due to harsh winter weather.
Government payrolls declined by 6,000. Federal employment fell by 10,000, and local governments lost 1,000, partly offset by 5,000 hires in state government. Federal jobs have dropped 330,000, or 11%, from the October 2024 peak.