U.S. economy lost 92,000 jobs in February, marking an unexpected setback for the economy
The U.S. job market shed 92,000 jobs in February, a sharp and unexpected setback for the economy after economists had forecast job growth.
The unemployment rate ticked up to 4.4% last month from 4.3% in January.
By the numbers
Economists polled by FactSet had predicted a payroll gain of 60,000 last month.
February marks the third time in the last five months that the job market has shown job losses. U.S. market futures are declining on the jobs report’s surprise miss, along with another big spike in crude oil prices amid the widening war in Iran.
A drop in hiring in the health care sector, which has recently been a source of employment gains, dragged down job growth in February. That sector shed 28,000 jobs, which the Labor Department attributed to recent strike activity. A nurses’ strike in California ended late last month.
February’s employment report marked a sharp reversal from January, when payroll gains were unexpectedly strong.
On Friday, the Labor Department revised job growth for that month down by 4,000 and for December by 65,000, a sign that job growth was weaker than previously reported in those months.
“Recent labor market data had been pointing to resilience, but today’s sharply weaker reading raises the risk that a different picture could be in play,” said Seema Shah, chief global strategist at Principal Asset Management, in an email. “Markets are being tugged in opposing directions, and this jobs report adds yet another layer of uncertainty to an already noisy backdrop.”
What experts are saying
The February jobs decline poses a sticky situation for the Federal Reserve as it seeks to bolster employment while keeping inflation at bay, experts say. Cutting rates could help kick-start the labor market, but the Fed would also risk fueling inflation, which has become a central concern as the war in Iran drives up global energy prices.
The Fed’s next rate decision will be announced on March 18.
“Today’s numbers may have put the Fed between a rock and a hard place,” Ellen Zentner, chief economic strategist for Morgan Stanley Wealth Management, said in an email. “Significant weakening in the labor market would support a rate cut, but given the risk that higher-for-longer oil prices could trigger another inflation surge, the Fed may feel compelled remain on the sidelines.”
Inflation fears are already rattling parts of the U.S. economy such as the housing market, where mortgage rates recently edged up to 6%.
