By Lucia Mutikani
WASHINGTON, March 6 (Reuters) – The U.S. economy unexpectedly shed jobs in February amid a strike by healthcare workers and harsh winter weather, while the unemployment rate increased to 4.4%.
Nonfarm payrolls decreased by 92,000 jobs last month after a downwardly revised 126,000 increase in January, the Labor Department’s Bureau of Labor Statistics said in its closely watched employment report on Friday. Economists polled by Reuters had forecast payrolls advancing by 59,000 jobs after increasing by a previously reported 130,000 in January.
Estimates ranged from a loss of 9,000 jobs to an increase of 125,000 positions. In addition to the strike by 31,000 healthcare workers at Kaiser Permanente and inclement weather, last month’s decline in employment was also payback after January’s hefty gains.
Economists said jobs gains in January had been boosted by an update of the birth-and-death model, which the BLS uses to estimate how many jobs were gained or lost because of companies opening or closing in a given month. The strike in California and Hawaii has since ended.
The labor market was stabilizing after stumbling in 2025 amid what economists said was uncertainty stemming from President Donald Trump’s sweeping tariffs, which he pursued under a law meant for use in national emergencies.
Though the import duties were struck down by the U.S. Supreme Court, Trump responded to the ruling by imposing a 10% global tariff and later announced it would rise to 15%.
The BLS incorporated new population controls that were delayed by last year’s 43-day government shutdown. The Trump administration’s immigration crackdown has reduced labor supply, also contributing to the labor market slowdown.
The Census Bureau last month estimated the nation’s population increased by just 1.8 million people, or 0.5%, to 341.8 million in the year ending June 2025.
The population controls only impacted January household survey data. That means the month-over-month levels of household employment, unemployment and labor force among other metrics are not directly comparable. The unemployment rate was at 4.3% in January. Despite the rise last month, the jobless rate is still low by historical standards and economists said they would get concerned only if it pushed above 4.5%.
With the Middle East war threatening to stoke inflation, economists believed the Federal Reserve was in no rush to resume cutting interest rates. Retail gasoline prices have surged by more than 20 cents per gallon since the U.S. and Israel launched air attacks on Iran last weekend, data from motorist advocacy group AAA showed. Tehran has retaliated, broadening a war that analysts said was descending into a wider regional conflict.
Economists saw a downside risk to the labor market from a prolonged war. The conflict is causing stock market volatility, which economists warned could prompt higher-income households, the main drivers of the economy through consumer spending, to cut back.
The Federal Reserve holds its next policy meeting on March 17-18 and is expected to keep its benchmark overnight interest rate in the 3.50%-3.75% range
(Reporting by Lucia Mutikani; Editing by Chizu Nomiyama)
Comments