The U.S. economy lost 92,000 jobs in February, according to the Bureau of Labor Statistics (BLS) survey of employers. Payrolls were revised lower for the prior two months. February’s drop was well below expectations for a gain of 55,000. The economy added an average of just 6,000 jobs over the trailing three months, versus an average monthly gain of 10,000 in 2025. Private sector jobs fell by 86,000 in February and have increased by an average of 18,000 over the last three months. According to the BLS, health care jobs fell by 28,000 due to strike activity. Sectors like construction and transportation may have been negatively impacted by weather.

The BLS’s survey of households reported an unemployment rate of 4.4%, slightly higher than the prior month and below the recent peak of 4.5% in November. The size of the labor force grew by 18,000, and the number of unemployed individuals was higher by 203,000.

Average hourly earnings — a proxy for wage growth — rose by 0.4% in February, versus consensus expectations for a gain of 0.3%. The trailing 12-month increase was 3.8%, up from 3.7% in the January observation

  Source: Bureau of Labor Statistics.

Bottom Line: February’s report was weaker than expected and puts recent stability in the labor market back into question. Should recent trends continue, the Fed could be faced with both softer growth and higher energy prices—similar to last year in the immediate aftermath of tariff increases. Markets expect the Fed will once again wait for more data before acting. Odds of any move at the upcoming meeting remain low.

Gary Pzegeo, CFA , is chief investment officer of CIBC Private Wealth. His responsibilities include chairing the Asset Allocation Committee and overseeing the investment administration, portfolio oversight, and fixed income and equity trading functions.