The US economy lost 92,000 jobs in February but the unemployment rate edged up to 4.4% from 4.3% in January, according to new data released by the US Bureau of Labor Statistics. The figures point to a labour market that is gradually losing momentum after several years of strong job growth.
Although the increase in the unemployment rate is minimal, the data shows that the labour market has been weakening for months. Slower hiring, job losses in some sectors, and a rise in the number of people staying unemployed for longer periods have all contributed to the slight uptick in unemployment.
Job losses in February
The biggest immediate reason for the rise in unemployment was that the US lost 92,000 jobs in February. This was a sharp shift from January, when the economy added 126,000 jobs after revisions.
Economists had expected the US to add around 60,000 jobs in February and keep unemployment steady. Instead, employment fell and the unemployment rate edged up.
Earlier job data was also revised downward, showing that the labour market had been weaker than previously reported. December’s numbers were revised from a gain of 48,000 jobs to a loss of 17,000 jobs, and January’s gains were slightly reduced.
Weak job growth through 2025
The February slowdown is part of a bigger trend. Job growth in the US slowed sharply in 2025.
After revisions, the economy added only 181,000 jobs in the entire year, making it the weakest year for job growth since the Covid pandemic. This is a huge drop from 2 million jobs added in 2024.
Most of the job growth in 2025 happened in the first half of the year. From July to December 2025, the economy actually lost about 45,000 jobs, showing that the labour market had already started weakening.
“The labour market was slowly deteriorating by a number of measures through 2025. The January report was at least a partial reversal of these trends. This reversal is not showing up in other data sources, like unemployment filings (moderate, but not improving) or Indeed’s job listings,” said Dean Baker, economist and co-director of the Center for Economic and Policy Research, in a post before the release of the February jobs report.
Job losses in key sectors
Some industries saw notable job losses in February, which also contributed to the increase in unemployment.
Health care employment fell by 28,000 jobs, mainly due to strikes. Offices of physicians lost about 37,000 jobs, while hospitals added 12,000 jobs, partly offsetting the decline.
The information sector also continued to lose jobs, cutting 11,000 positions in February. Over the past year, the sector has been steadily shrinking.
The federal government workforce also continued to decline, with 10,000 jobs lost in February. Since October 2024, federal employment has fallen by 330,000 jobs, an 11% drop.
Meanwhile, transportation and warehousing lost about 11,000 jobs, mainly because of losses among courier and delivery services. Most other industries, including manufacturing, retail, finance and construction saw little change in employment.
More people unemployed for longer periods
Another worrying trend is the rise in long-term unemployment. About 1.9 million people have been unemployed for 27 weeks or more, which is higher than 1.5 million a year ago. These long-term unemployed workers now make up 25.3% of all unemployed people. This shows that once people lose their jobs, it is becoming harder for them to find new work.
Labour force participation remained flat
The labour force participation rate, which measures the share of people working or looking for work, remained unchanged at 62 % in February. Similarly, the employment-population ratio stayed steady at 59.3%. These numbers show that the size of the workforce has not changed much over the past year.
Population changes also affected labour data
The February report also included updated population estimates based on new calculations from the US Census Bureau. The revised estimates show fewer men aged 25 to 54, a group that usually has high workforce participation. At the same time, there are more women aged 65 and older, who typically participate less in the labour market. These demographic changes put downward pressure on labour force participation and employment levels, though they did not directly change the unemployment rate.
Wages and work hours stayed steady
Regardless of the job losses, wage growth remained stable. Average hourly earnings rose by 15 cents to $37.32 in February, an increase of 0.4% during the month and 3.8% over the past year. The average workweek remained unchanged at 34.3 hours.
What this means for the US economy
The latest labour market data comes just before the Federal Reserve’s interest rate meeting on March 17–18, where policymakers will decide whether to change interest rates. A weakening labour market could increase pressure on the Fed to cut interest rates to support economic growth. However, some officials remain cautious because inflation is still a concern.
Beth M Hammack, president of the Federal Reserve Bank of Cleveland, has called for an extended pause in interest rates even though Donald Trump has been pushing for rate cuts.