210
10 days ago
US jobs report: 92,000 jobs cut in February, says BLS; unemployment rate climbs to 4.4%
Summary
US employers unexpectedly reduced hiring in February, and the unemployment rate increased, fueling concerns about the labor market’s strength, according to Bloomberg.
According to data released Friday by the Bureau of Labor Statistics (BLS), nonfarm payrolls fell by 92,000 last month following a strong start to the year. The unemployment rate rose to 4.4%. The drop in payrolls was partly driven by a decline in health care employment amid strike activity.
The report raises questions about whether the labor market is truly steadying after experiencing the weakest hiring outside of a recession in decades. Although job growth surged earlier in the year and unemployment claims remain low, companies may be moving forward with a series of previously announced layoffs.
Additionally, recent productivity gains highlight how investments in artificial intelligence have enabled some firms to operate with smaller workforces.
These developments could shift the Federal Reserve’s focus back to the jobs market as it evaluates how long to maintain interest rates. Policymakers have recently been paying closer attention to inflation, even before the US-Israel war on Iran, reported Bloomberg.
In an interview, White House economic adviser Kevin Hassett said that the US economy remains "really strong" despite a loss of 92,000 jobs last month.
Speaking to CNBC, Hassett suggested that hiring trends should be evaluated over several months rather than focusing on a single month’s data. He added that the latest job figures were in line with expectations, noting that reduced immigration means breakeven employment is likely around 30,000 to 40,000 jobs per month.
He concluded, "It's consistent with everything else we're seeing, which is that the economy is really strong."
Meanwhile, US labor productivity grew in the fourth quarter at a pace higher than expected, following the strongest gain in five years, providing further evidence that companies are seeking greater efficiency to manage costs.
Data released Thursday by the BLS showed that nonfarm employee output per hour rose at an annualised rate of 2.8%. Productivity growth for the third quarter was revised upward to 5.2%.
This trend toward improved efficiency has helped keep wage pressures in check, supporting the Federal Reserve officials’ view that the labor market is no longer contributing significantly to inflation.
Labor expenses represent the largest cost for many companies, prompting them to adopt new technologies and equipment to boost worker productivity. Investments in innovations such as artificial intelligence have enabled some firms to operate with smaller workforces, contributing to subdued hiring last year.
Unit labor costs, the amount businesses pay to produce a single unit of output, increased by 2.8% in the fourth quarter after falling in the previous two quarters.
Although economic growth slowed toward the end of last year, much of this was due to the effects of the longest US government shutdown on record, which led to the largest decline in federal spending since 1972. Nevertheless, business investment continued to grow at a strong pace.
Economists surveyed by Bloomberg had a median expectation of 1.9% growth in fourth-quarter productivity. According to the Bureau of Labor Statistics, productivity rose 2.2% for the full year, while labor costs increased 1.9% in 2025.
Analysts generally anticipate that efficiency improvements will continue this year, driven by ongoing investment in artificial intelligence. Additionally, capital investment incentives under President Donald Trump’s One Big Beautiful Bill Act could further foster business spending.
The productivity report indicated that fourth-quarter nonfarm business output rose at an annualized rate of 2.6%. Hours worked fell 0.2%, while hourly compensation, not adjusted for inflation, increased 5.7%. After adjusting for inflation, worker pay grew at the fastest rate in over a year.
Separate data released Thursday by Challenger, Gray & Christmas Inc. showed that announced job cuts in February fell compared with a year earlier. Applications for unemployment insurance also remained low last week, providing additional evidence of a steadying labor market.
(With inputs from agency)
Garvit Bhirani is a journalist based in Gurugram. He is a Deputy Chief Content Producer at LiveMint, where he covers national and international news s...Read More
Stay updated with the latest Trending, India , World and US news.
Download the Mint app and read premium stories
According to data released Friday by the Bureau of Labor Statistics (BLS), nonfarm payrolls fell by 92,000 last month following a strong start to the year. The unemployment rate rose to 4.4%. The drop in payrolls was partly driven by a decline in health care employment amid strike activity.
The report raises questions about whether the labor market is truly steadying after experiencing the weakest hiring outside of a recession in decades. Although job growth surged earlier in the year and unemployment claims remain low, companies may be moving forward with a series of previously announced layoffs.
Additionally, recent productivity gains highlight how investments in artificial intelligence have enabled some firms to operate with smaller workforces.
These developments could shift the Federal Reserve’s focus back to the jobs market as it evaluates how long to maintain interest rates. Policymakers have recently been paying closer attention to inflation, even before the US-Israel war on Iran, reported Bloomberg.
In an interview, White House economic adviser Kevin Hassett said that the US economy remains "really strong" despite a loss of 92,000 jobs last month.
Speaking to CNBC, Hassett suggested that hiring trends should be evaluated over several months rather than focusing on a single month’s data. He added that the latest job figures were in line with expectations, noting that reduced immigration means breakeven employment is likely around 30,000 to 40,000 jobs per month.
He concluded, "It's consistent with everything else we're seeing, which is that the economy is really strong."
Meanwhile, US labor productivity grew in the fourth quarter at a pace higher than expected, following the strongest gain in five years, providing further evidence that companies are seeking greater efficiency to manage costs.
Data released Thursday by the BLS showed that nonfarm employee output per hour rose at an annualised rate of 2.8%. Productivity growth for the third quarter was revised upward to 5.2%.
This trend toward improved efficiency has helped keep wage pressures in check, supporting the Federal Reserve officials’ view that the labor market is no longer contributing significantly to inflation.
Labor expenses represent the largest cost for many companies, prompting them to adopt new technologies and equipment to boost worker productivity. Investments in innovations such as artificial intelligence have enabled some firms to operate with smaller workforces, contributing to subdued hiring last year.
Unit labor costs, the amount businesses pay to produce a single unit of output, increased by 2.8% in the fourth quarter after falling in the previous two quarters.
Although economic growth slowed toward the end of last year, much of this was due to the effects of the longest US government shutdown on record, which led to the largest decline in federal spending since 1972. Nevertheless, business investment continued to grow at a strong pace.
Economists surveyed by Bloomberg had a median expectation of 1.9% growth in fourth-quarter productivity. According to the Bureau of Labor Statistics, productivity rose 2.2% for the full year, while labor costs increased 1.9% in 2025.
Analysts generally anticipate that efficiency improvements will continue this year, driven by ongoing investment in artificial intelligence. Additionally, capital investment incentives under President Donald Trump’s One Big Beautiful Bill Act could further foster business spending.
The productivity report indicated that fourth-quarter nonfarm business output rose at an annualized rate of 2.6%. Hours worked fell 0.2%, while hourly compensation, not adjusted for inflation, increased 5.7%. After adjusting for inflation, worker pay grew at the fastest rate in over a year.
Separate data released Thursday by Challenger, Gray & Christmas Inc. showed that announced job cuts in February fell compared with a year earlier. Applications for unemployment insurance also remained low last week, providing additional evidence of a steadying labor market.
(With inputs from agency)
Garvit Bhirani is a journalist based in Gurugram. He is a Deputy Chief Content Producer at LiveMint, where he covers national and international news s...Read More
Stay updated with the latest Trending, India , World and US news.
Download the Mint app and read premium stories
AI Description
The US jobs report for February shows a significant reduction in nonfarm payrolls, with 92,000 jobs cut. The unemployment rate rose to 4.4%, raising concerns about the labor market's strength.