US jobs plummet unexpectedly as unemployment climbs to 4.4% in February

The latest US jobs report has revealed a sharp downturn in employment, with February's nonfarm payrolls falling by 92,000. This figure contrasts starkly with expectations of a 58,000-job increase. The unemployment rate also climbed to 4.4%, surpassing forecasts of 4.3%.

Revisions to previous months added to the bleak picture. January's initially reported 130,000 new jobs were adjusted down to 126,000, wiping out around 69,000 positions from earlier estimates. December 2025's data faced an even steeper correction, shifting from a 48,000-job gain to a 17,000-job loss.

The decline in employment was partly driven by a major labour strike at Kaiser healthcare, which removed about 28,000 healthcare jobs from the monthly count. Severe winter weather also disrupted hiring in the construction sector throughout February.

On the economic front, retail sales in January dropped by 0.2%, with seven out of thirteen tracked categories showing declines. Meanwhile, oil prices surged due to rising tensions in the Middle East. Brent crude jumped 8.8% to $79.33 per barrel by early March, later reaching between $82 and $92—its strongest daily gain since 2022. The spike has added to inflation concerns.

Federal Reserve officials recognised the troubling data but cautioned against overreacting to a single report. Despite this, market expectations for interest rate cuts in 2026 have grown, with traders anticipating multiple reductions.

The jobs report has intensified economic uncertainty, with weaker hiring, higher unemployment, and rising oil prices all contributing to inflation pressures. Markets are now pricing in potential Federal Reserve rate cuts later this year as policymakers monitor unfolding conditions.