U.S. Economy Lost 92,000 Jobs in February as Unemployment Rose to 4.4%

The U.S. economy shed 92,000 jobs in February, a sharp and unexpected setback after economists had forecast a gain, according to CBS News and the Bureau of Labor Statistics. The unemployment rate rose to 4.4% from 4.3% in January. Economists polled by FactSet had predicted a payroll increase of 60,000, CBS News said.

February was the third time in the last five months that the job market showed losses, CBS News reported. A drop in health care hiring, recently a source of strong employment gains, dragged on the total: the sector shed 28,000 jobs, and the Bureau of Labor Statistics said the decrease reflected strike activity. A nurses’ strike in California ended late last month, the outlet added.

Some analysts cautioned against reading too much into the number. CBS News reported that strikes and winter storms may have distorted the data and overstated the weakness. “Just as the January jobs report overstated any emerging strength in the labor market, the February employment data give a false impression of deteriorating labor market conditions,” Nancy Vanden Houten, lead economist at Oxford Economics, said in an email, according to CBS News. Others were more cautious. Seema Shah, chief global strategist at Principal Asset Management, told CBS News the weak reading raises the risk that a different picture could be in play and adds uncertainty to an already noisy backdrop.

The Labor Department also revised earlier months: January job growth was revised down by 4,000 and December by 65,000, the bureau said, a sign that the labor market was weaker than first thought. Payroll gains in January had been unexpectedly strong. Hiring has been sluggish for some time: employers added a total of 181,000 jobs last year, the lowest since the pandemic year of 2020, and the pace of job turnover hit a nine-year low of 5.8% in January, according to an ADP report cited by CBS News.

Markets reacted to the combination of weak hiring and rising energy prices. CBS News reported that U.S. stocks fell on the payrolls miss and that oil prices jumped to their highest level in nearly two years amid the widening war in Iran.

The mix could complicate the Federal Reserve’s decisions on interest rates, CBS News reported, since cutting rates could help employment but fuel inflation, which has become a central concern as the war drives up global energy prices. Fed officials will be weighing whether February’s data is a one-time blip or reflects a longer-term trend, the outlet said.