Hiring in February was surprisingly weak – complicating the path to interest-rate cuts by the Federal Reserve as the conflict in Iran reheats inflation fears.
US employment declined by 92,000 in February – a sharp slowdown from an increase of 126,000 in January and far below estimates of an added 50,000 jobs, the Bureau of Labor Statistics said Friday morning.
The unemployment rate ticked up to 4.4%, from 4.3% the previous month, according to government data.
“Although February is a short month and numbers often come in lower, today’s report fell significantly short of projections and indicates that employers were far more restrained in their hiring plans as the month began,” Ger Doyle, North America president at ManpowerGroup, a workforce solutions firm, said in a note Friday.
Meanwhile, January’s surprisingly strong report was likely helped by a few one-time factors, like slower holiday hiring at the end of last year – meaning fewer layoffs were necessary at the start of 2026.
Futures tied to the Dow Jones Industrial Average tumbled 552 points, or 1.2%, while S&P 500 and Nasdaq futures fell 1.2% and 1.4%, respectively.
Investors had been banking on a solid jobs report to leave open a possible path to interest-rate cuts – but instead the weak numbers piled on top of inflation fears amid the ongoing conflict in Iran.
National average gasoline prices soared to $3.32 a gallon, according to AAA, as Tehran cut off a vital maritime route for 20% of the world’s oil – and economists warned energy shocks could cause a broader ripple effect across consumer prices.
