A new employment report released Friday by the U.S. Bureau of Labor Statistics shows the American economy lost 92,000 jobs in February, marking one of the most significant labor market setbacks during President Donald Trump’s second term and prompting economists to warn that the economic outlook may be shifting.
The report showed the unemployment rate rising to 4.4 percent from 4.3 percent the previous month. Economists had expected the labor market to continue expanding, although at a slower pace, with forecasts predicting roughly 60,000 new jobs. Instead, the data revealed broad losses across multiple industries, raising questions about the resilience of the labor market amid growing economic uncertainty.
Heather Long, chief economist at Navy Federal Credit Union, described the report as “dismal,” noting that employment growth has been negative over several months.
“Total job gains since from May 2025 to February 2026 are now—19,000,” she wrote. “Companies are not hiring in the face of all of these headwinds and uncertainty. And even healthcare is starting to slow down.”
The February report also included revisions to previously reported employment numbers that further reshaped the picture of recent labor market activity. January’s reported job gains were revised down to 126,000 from 130,000. December’s numbers were revised more sharply, shifting from an estimated gain of 48,000 jobs to a loss of 17,000.
University of Michigan economist Justin Wolfers said the new data significantly alters the economic narrative that had been developing earlier in the year.
“The economic story just changed dramatically” because of the jobs report, which also showed downward revisions to the estimated jobs created in December and January.
Wolfers added that the data is likely to revive concerns about the broader economic outlook.
“Recession questions are back on the menu,” he said.
According to Bureau of Labor Statistics data, the U.S. economy has shed jobs in five of the past nine months. Since May 2025, the first month after Trump announced sweeping global tariffs, the labor market has lost a net total of 19,000 jobs.
Several major sectors experienced job losses in February. Healthcare employment declined by 28,000 jobs, leisure and hospitality employment fell by 27,000 jobs, and construction employment dropped by 11,000 jobs.
The decline in healthcare employment drew particular attention from economists because the sector had previously been one of the most consistent drivers of job growth.
Mike Konczal, senior director of policy and research at the Economic Security Project, said the change in healthcare employment could alter the broader labor market dynamic.
“This is the first month in years where healthcare jobs went negative, really changing the dynamic,” he said. “Cuts to Medicaid, cuts to ACA… suddenly the thing that was 187 percent of private jobs since liberation day, holding it together, may be giving out?”
Some economists emphasized that temporary factors likely influenced the February numbers. A mid-month strike by Kaiser Permanente nurses and healthcare workers was expected to reduce healthcare employment totals by approximately 31,000 jobs. Because the strike ended on Feb. 23, economists expect the March employment report to show a corresponding rebound.
Weather conditions may also have played a role. A severe cold wave early in the month was expected to weigh on industries such as construction and leisure and hospitality.
Diane Swonk, chief economist at KPMG U.S., said the report illustrates how dependent the labor market had become on a limited number of industries for growth.
“We had a labor market that nearly froze last year, and it seemed to show some signs of thawing, which made it slushy at best,” Swonk said.
She added that the broader labor market remains vulnerable.
“It really illustrates how fragile the economy is on the labor market side of it,” she said. “The labor market weakness that we had seen emerge last year has not completely abated.”
Economists also pointed to policy uncertainty and rising costs as factors discouraging hiring. Businesses have been navigating questions surrounding tariffs on imported goods, rising energy prices, and broader geopolitical instability.
Alex Jacquez, chief of policy and advocacy at Groundwork Collaborative, said the February report reflects the consequences of those pressures.
“The deterioration in the labor market is visible from space,” Jacquez said. “As the president piles on blanket tariffs and oil prices soar, today’s report confirms he’s sent the economy straight into a stagflation spiral.”
The report also arrives at a challenging moment for U.S. monetary policy. Federal Reserve officials have been attempting to balance inflation control with maintaining employment growth.
Daniel Hornung, policy fellow at the Stanford Institute for Economic Policy Research, said the new employment data complicates that effort.
“This morning’s report… comes at a difficult moment, with inflation still above target and an oil price shock threatening to raise inflation further,” Hornung said. “The report complicates the Fed’s efforts to keep both unemployment and inflation low, and it makes it difficult for the administration to argue heading into the midterms that their policies are leading to the kind of growth or improvement in living standards that they’ve long promised.”
Political leaders also reacted to the data. Rep. Brendan Boyle, ranking member of the House Budget Committee, said the report reflects ongoing economic struggles facing workers and families.
“Month after month, the data shows Donald Trump’s economy is failing American families,” Boyle said. “The job market is weakening, costs remain high, and Trump’s illegal tariff taxes continue to hurt businesses and workers. Trump and his allies in Congress know their agenda isn’t working. Instead of helping working families, they are pushing more tariff taxes and more tax breaks for billionaires. It is clear Republicans in Washington simply do not care about working families.”
Despite the negative headline numbers, some economists cautioned that not all labor market indicators point to deterioration. Wage growth rose 0.4 percent in February, pushing the annual wage growth rate to 3.8 percent, which remains above inflation.
Other indicators also showed modest improvement. The number of workers seeking part-time employment for economic reasons declined, as did the number of marginally attached and discouraged workers.
Nicole Bachaud, economist at ZipRecruiter, said those indicators suggest the labor market may retain underlying stability despite February’s job losses.
“The headline payroll loss was shocking; however, other data points within the report underscore that the foundation beneath the labor market isn’t necessarily weakening,” she said.
Several economists noted that warning signs had already been emerging in earlier employment data. University of Pennsylvania economist Heather Boushey said the February report reflects trends that had been developing for months.
“Today’s data should not come as a shock as there have been signs of weakening in the U.S. labor market for quite some time,” she said. “The Trump administration’s focus on undermining the U.S. economy rather than investing in America may be coming home to roost.”
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