By Ethan Faverino |
The U.S. labor market experienced a sharp downturn in February 2026, with nonfarm payroll employment declining by 92,000 jobs, according to the latest Employment Situation report from the Bureau of Labor Statistics, released March 6. This marked a significant reversal of January’s stronger-than-expected performance and fell well short of economists’ consensus forecasts for modest gains.
The Joint Economic Committee highlighted the figures in its Monthly Employment Update, noting that the decline consisted of -86,000 jobs in the private sector and -6,000 in government.
The headline unemployment rate (U-3) rose 0.1% to 4.4% while the broader U-6 measure—which includes underemployed workers—improved slightly, falling 0.2% to 7.9%. The labor force participation rate dipped 0.1% to 62%, and the employment-to-population ratio decreased to 59.3%.
Significant downward revisions to prior months compounded the weaker outlook. December 2025 was revised to show a net loss of 17,000 jobs (from an initial gain of 45,000), and January 2026 was adjusted down by 4,000 to 126,000 jobs. Combined, these revisions reduced reported employment gains for December and January by 69,000 jobs.
Sector performance in February showed mixed results. Gains were led by financial activities (+10,000 jobs) and other services (+8,000 jobs). Losses were concentrated in private education and health services (-34,000 jobs, influenced by strike activity in health care) and leisure and hospitality (-27,000 jobs).
On a year-over-year basis (February 2025 to February 2026), total nonfarm payroll rose by approximately 156,000 jobs, with strong contributions from private education and health services (+658,000) and leisure and hospitality (+126,000). However, notable declines occurred in federal government (-314,000) and trade, transportation, and utilities (-191,000).
Wage growth remained positive amid the slowdown. For all private non-farm employees, average hourly earnings increased 3.84% year-over-year to $37.32, while average weekly earnings rose 4.14% to $1,280.08. Among production and nonsupervisory employees, hourly earnings grew 3.69% to $32.03, and weekly earnings advanced 4.31% to $1,082.61.
The latest Job Openings and Labor Turnover Survey data (for December 2025) indicated cooling demand, with nonfarm job openings falling by 386,000 to 6.54 million. Hires rose by 172,000 to 5.29 million, while separations increased by 107,000 to 5.25 million, including modest gains in quits and larger rises in layoffs and discharges.
The data points to emerging softness in the labor market, influenced by temporary factors including the severe winter weather and significant strike activity in health care, though broader indicators like wage growth and a still-low unemployment rate suggest resilience.
Ethan Faverino is a reporter for AZ Free News. You can send him news tips using this link.
