WASHINGTON (AP) – U.S. employers cut 92,000 jobs last month, a sign that the labor market continues to struggle. The unemployment rate rose to 4.4%.
SEE: The revised economic statistics put uncertainty in the job market
The Labor Department reported on Friday that hiring slowed from January, when companies, nonprofits and government agencies added a healthy 126,000 jobs. Economists had expected 60,000 new jobs in February.
The survey also cut 69,000 jobs between December and January.
The labor market was expected to return this year from the deficit of 2025 when the economy, affected by the President, Mr. Donald Trump, tax cuts and the effects of high prices, only produced 15,000 jobs per month. And January’s hiring came in above expectations.
“Just when it looked like the labor market was stabilizing, this report delivers a blow-down to that outlook,” said Olu Sonola, head of US economics at Fitch Ratings. “It’s bad news any way you look at it.”
Job losses were widespread.
READ MORE: The US economy has always been unstable. War in Iran could increase uncertainty
Construction companies cut 11,000 jobs last month, likely reflecting the cold weather. And the health care firm lost 28,000 jobs after a four-week strike by more than 30,000 nurses and other front-line workers at Kaiser Permanente in California and Hawaii. Health care has been one of the strongest areas of the job market.
Factories cut 12,000 jobs and have now lost jobs for 14 of the past 15 months. Restaurants and bars lost nearly 30,000 jobs. Management and support firms lost nearly 19,000 jobs and delivery and messenger services nearly 17,000.
Financial firms added 10,000 jobs, although job cuts continue to hit that sector this year.
Average hourly earnings rose 0.4% from January and 3.8% from a year ago.
The outlook for the job market – and the economy as a whole – has been clouded by the war with Iran.
Employers hesitated to hire last year because of uncertainty about President Donald Trump’s tax cuts — and the unpredictable way he rolled them out.
READ MORE: Several countries sue over new global tariffs Trump enacted after his Supreme Court loss
Higher interest rates, created by the Federal Reserve to fight inflation following the CCIDID-19 pandemic, also weighed on the labor market in 2025.
“The job market is struggling in the face of a lot of headwinds,” said Heather Long, chief economist at Navy Federal Credit Union. “Companies are going to be more reluctant to hire this spring until the war is over and they can see consumers still spending. It’s a tough time for the US economy.”
The Fed often lowers rates to encourage borrowing, spending, and growth while often raising rates to cool the economy and fight inflation. The committee is currently divided between those who are still worried about rising prices of goods and others who are worried that the lack of employment could affect the economy of the country.
The impact of Trump’s trade policies could be reduced in 2025. Tariffs on foreign imports became smaller and less consistent after he reached a trade deal last year with China and deals with leading US trade partners such as Japan and the European Union. Many businesses have also learned how to reduce costs, often by passing them on to customers through higher prices.
READ MORE: EU suspends US trade deal as it seeks clarification on Trump’s new 15% global tariffs
Businesses needed “a year to cook some of the costs into their business, and now it’s time to get back to growth mode,” said Andy Decker, CEO of Atlanta-based Goodwin Recruiting.
The Supreme Court also struck down Trump’s biggest and boldest tax bill — even as they’re replacing it with new ones.
Hiring continues to lag behind the hiring boom of 2021-2023 when the economy was recovering from the pandemic shutdown and the United States was adding nearly 400 jobs a month. Many economists describe today’s labor market as “no-hire, no-fire”: Companies are reluctant to add workers but don’t want to part with the ones they have.
Fortunately, finding a job-perfect growth is easy these days.
Until a year or two ago, employers had to hire more than 100,000 people a month in order to keep the unemployment rate at bay.
But Baby Boomer retirements and the impeachment of President Donald Trump mean fewer people are running for office. So the vacancy rate is low — anywhere from zero to 50,000 jobs a month, said Joe Brusuelas, chief economist at tax consulting firm RSM. “Under the current situation, 70,000 should be considered strong,” he said.
Companies may be cutting back on hiring as they buy, install and figure out how to use new technologies, including artificial intelligence. AI, after all, could mean they “can do more with less” and will need fewer workers, especially for entry-level positions, Brusuelas said.
They’re thinking, he said, “we’ve put an awful lot of money into (spending), and we want to see how much we can get out with our current workforce… The last thing you want to do is hire more young people and then let them go.” .
AP Economics writer Christopher Rugaber contributed to this report.
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