U.S. payrolls unexpectedly fell by 92,000 in February; unemployment rate rises to 4.4%

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The U.S. economy lost jobs in February, a month marred by severe winter weather and a strike at a major health care provider, the Bureau of Labor Statistics reported Friday.

Nonfarm payrolls fell by 92,000 for the month, compared to the estimate for 50,000 and below the downwardly revised January total of 126,000. February marked the third time in the past five months that payrolls declined, following a sharp revision showing a drop of 17,000 in December.

At the same time, the unemployment rate edged higher to 4.4% as jobs declined across key areas. A broader measure of unemployment that includes discouraged workers and those holding part-time positions for economic reasons moved lower, at 7.9% or 0.2 percentage point below the January level.

Health care, the primary growth driver in payrolls, saw a loss of 28,000 due largely to a strike at Kaiser Permanente that sidelined more than 30,000 workers in Hawaii and California. Though the strike has since been resolved, it occurred during the BLS survey week so it subtracted from the jobs total.

While the jobs picture was weak, wages rose more than expected. Average hourly earnings increased 0.4% for the month and 3.8% from a year ago, both 0.1 percentage point above forecast.

“I think it just tells us that the hopes that the labor market was steadying, maybe that was too much,” Mary Daly, president of the Federal Reserve Bank of San Francisco, told CNBC. “We also have inflation printing above target and oil prices rising. How long they last, we don’t know, but both of our goals are in our risks now.”

Information services, a sector hit by artificial intelligence-related cuts, also lost jobs, down 11,000 as part of a 12-month trend in which the sector has lost an average of 5,000 per month. Manufacturing saw a loss of 12,000, despite tariffs aimed at reshoring jobs from overseas.

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Yikes. Almost every major industry group shed jobs in February.

Private sector overall: -86,000
Hospitality -27,000
Healthcare -28,000
Manufacturing -12,000
Tranport/warehouse -11,000
Construction -11,000
Information -11,000
Federal gov't -10,000
Professional/biz -5,000
Mining -2,000
Social assistance +9,000
Finance +10,000

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