U.S. Employers Shed 92,000 Jobs as Unemployment Rate Rises to 4.4%

The Labor Department reported an unexpected decline in payrolls last month as hiring slowed and the unemployment rate ticked upward.

By yourNEWS Media Newsroom

American employers cut 92,000 jobs last month, an unexpected decline that signals continued strain in the labor market as the unemployment rate rose to 4.4%, according to new data released Friday by the Labor Department.

The report showed hiring deteriorated from January, when companies, nonprofit organizations and government agencies collectively added 126,000 jobs. Economists had anticipated roughly 60,000 new jobs in February.

The government also revised earlier payroll figures downward, removing 69,000 jobs from the previously reported totals for December and January.

The labor market had been expected to strengthen this year following a sluggish 2025, when the U.S. economy generated an average of just 15,000 jobs per month amid the combined effects of President Donald Trump’s tariff policies and elevated interest rates.

Several industries reported declines last month. Construction companies eliminated 11,000 jobs, a drop economists partly attributed to severe winter weather conditions that slowed activity.

Healthcare employment also fell sharply, shedding 28,000 positions following a four-week strike involving more than 30,000 nurses and other frontline workers at Kaiser Permanente facilities in California and Hawaii.

The outlook for the labor market remains uncertain as geopolitical tensions escalate, particularly amid the ongoing war with Iran.

Employers were already cautious about expanding payrolls in the previous year due to uncertainty surrounding Trump’s trade policies and the unpredictable rollout of tariffs affecting global supply chains.

At the same time, the Federal Reserve’s interest rate increases — implemented to counter inflation following the COVID-19 pandemic — continued to place pressure on business investment and hiring decisions throughout 2025.

Some analysts believe the economic impact of those trade measures may gradually diminish. Trump’s tariffs became smaller and more predictable after the administration reached a trade truce with China last year and finalized agreements with major U.S. trading partners including Japan and the European Union.

Businesses have also adapted by incorporating tariff-related costs into their pricing structures.

Andy Decker, chief executive of Atlanta-based Goodwin Recruiting, said companies have had time to adjust.

“Businesses needed a year to bake some of those costs into their business model, and now it’s time to get back to growth mode,” Decker said.

Meanwhile, the Supreme Court has invalidated the largest of Trump’s tariffs, although the administration has moved to replace them with new import duties.

Despite the latest decline in payrolls, economists note that today’s job market differs from the hiring surge seen earlier in the decade. Between 2021 and 2023, the economy was rebounding from pandemic shutdowns and employers added nearly 400,000 jobs per month on average.

Economists increasingly describe the current labor environment as a “no-hire, no-fire” market. Businesses remain hesitant to expand their workforce but are also reluctant to lay off existing employees.

In previous years, employers needed to add more than 100,000 jobs each month to prevent the unemployment rate from increasing. That threshold has fallen as demographic shifts reduce labor supply.

Retirements among Baby Boomers and deportations carried out under President Trump’s immigration enforcement policies have reduced the number of people competing for available jobs.

Joe Brusuelas, chief economist at the consulting firm RSM, said the break-even level for monthly job growth has fallen substantially.

“Under the current conditions, 70,000 should be considered solid,” Brusuelas said, estimating that maintaining employment stability may now require job growth between zero and 50,000 positions per month.

Another factor shaping hiring decisions is the rapid adoption of new technologies, particularly artificial intelligence.

Companies are investing heavily in automation and digital systems, which analysts say could allow businesses to increase productivity without expanding their workforce — especially for entry-level roles.

“They are thinking we’ve invested an awful lot of money in capital expenditures, and we need to see how much we can produce with our current labor force,” Brusuelas said. “The last thing you want to do is hire a lot of young people and then let them go.”