US unemployment rate ticks higher to 4.4 per cent

U.S. employers unexpectedly cut 92,000 jobs last month; This was a sign that the labor market remained under pressure.

The unemployment rate rose to 4.4 percent.

The U.S. Labor Department reported Friday that hiring worsened from January, when companies, nonprofits and government agencies added a healthy 126,000 jobs.

Economists expected 60,000 new jobs in February.

The revisions also removed 69,000 jobs from December and January payrolls.

The job market was expected to rebound this year from a lackluster 2025, when the economy created just 15,000 jobs a month, battered by the lingering effects of U.S. President Donald Trump’s erratic tariff policies and high interest rates.

And January hiring exceeded expectations.

“Just when the labor market appears to be stabilizing, this report deals a major blow to that view,” said Olu Sonola, head of the U.S. economy at Fitch Ratings.

“It’s bad news no matter how you look at it.”

Job losses were widespread.

Construction companies cut 11,000 jobs last month; This is probably a reflection of the cold weather.

Healthcare companies cut 28,000 jobs following a four-week strike by more than 30,000 nurses and other front-line workers at Kaiser Permanente in California and Hawaii.

Healthcare has been one of the strong points of the U.S. job market.

Factories laid off 12,000 people and lost jobs in 14 of the last 15 months.

Nearly 30,000 people lost their jobs in restaurants and bars.

Administrative and support services firms lost about 19,000 jobs, and courier and messenger services lost about 17,000.

Financial firms added 10,000 new jobs, but layoffs continue to impact this industry this year.

Average hourly wages increased by 0.4 percent compared to January and 3.8 percent compared to the previous year.

Hiring continues to lag far behind the hiring boom of 2021-2023, when the economy rebounded from pandemic lockdowns and the U.S. added nearly 400,000 jobs per month.

Many economists describe today’s job market as “no hiring, no firing”: companies are reluctant to add workers but don’t want to let go of what they have.

Fortunately, decent enough job growth is easier to achieve these days.

Until a year or two ago, employers needed to hire more than 100,000 people a month to keep the unemployment rate from rising.

But Baby Boomer retirements and management expulsions mean there are fewer people competing for jobs.

The break-even point is much lower, somewhere between zero and 50,000 jobs per month, said Joe Brusuelas, chief economist at tax and consulting firm RSM.

“Under current circumstances, 70,000 should be considered solid,” he said.

Companies may be delaying hiring as they purchase, install and try to figure out how best to use new technologies, including artificial intelligence.

Ultimately, AI means they can potentially “do more with less,” Brusuelas said, and will need fewer workers, especially for entry-level positions.

They think, he said, “we’ve invested a lot of money (in capital expenditures) and we need to see how much we can produce with our current workforce… The last thing you want to do is hire a lot of young people and then let them go.”