US Employers Cut 92,000 Jobs as Unemployment Rate Rises

Surprise drop in hiring signals labor market strain amid economic headwinds

Published on Mar. 6, 2026

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American employers unexpectedly cut 92,000 jobs last month, a sign that the labor market remains under strain. The unemployment rate rose to 4.4%. Hiring deteriorated from January, when companies, nonprofits and government agencies added a healthy 126,000 jobs. Economists had expected 60,000 new jobs in February.

Why it matters

The unexpected job losses and rise in unemployment rate indicate the labor market is still facing challenges, despite expectations of a rebound this year. Factors like the lingering effects of high interest rates, the war with Iran, and companies' reluctance to hire amid economic uncertainty could be contributing to the weak job growth.

The details

Hiring was down across several sectors, including construction, healthcare, manufacturing, and the service industry. However, financial firms added 10,000 jobs. Wages rose 0.4% from January and 3.8% from a year earlier. Experts say companies may be holding off on hiring as they invest in new technologies like artificial intelligence, which could allow them to 'do more with less' and need fewer workers.

  • The Labor Department reported the job losses and unemployment rate increase on Friday, March 6, 2026.
  • In January 2026, companies added 126,000 jobs.

The players

Donald Trump

The former U.S. president whose erratic tariff policies and the lingering effects of high interest rates contributed to the lackluster job growth in 2025.

Heather Long

The chief economist at Navy Federal Credit Union who said 'The job market is struggling in the face of so many headwinds.'

Andy Decker

The CEO of Atlanta-based Goodwin Recruiting who said businesses had a 'year to bake some of those [tariff] costs into their business model, and now it's time to get back to growth mode.'

Joe Brusuelas

The chief economist at the tax and consulting firm RSM who said companies may be holding off on hiring as they invest in new technologies like artificial intelligence.

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What they’re saying

“The job market is struggling in the face of so many headwinds. Companies are going to be even more reluctant to hire this spring until the war ends and they can see consumers still spending. It's a tense time for the U.S. economy.”

— Heather Long, Chief Economist, Navy Federal Credit Union

“Businesses needed a year to bake some of those costs into their business model, and now it's time to get back to growth mode.”

— Andy Decker, CEO, Goodwin Recruiting

“Under the current conditions, 70,000 should be considered solid. We've invested an awful lot of money in (capital expenditures), and we need to see how much we can produce with our current labor force... The last thing you want to do is hire a lot of young people and then let them go.”

— Joe Brusuelas, Chief Economist, RSM

What’s next

Economists will be closely watching the next several months of job data to see if the labor market can rebound from this unexpected decline. The outcome of the war with Iran and its impact on the broader economy will also be a key factor in determining the direction of the job market.

The takeaway

The surprise drop in hiring and rise in unemployment underscores the fragility of the labor market, which is facing a range of economic headwinds including the lingering effects of high interest rates, trade policy uncertainty, and now the war with Iran. Companies appear to be taking a cautious approach to hiring as they focus on maximizing productivity through investments in new technologies.