Jobs in the United States (US) fell unexpectedly last month, raising fresh doubts about the strength of the country’s labour market.
Although economists had widely expected hiring to remain broadly stable, official figures released by the US Labor Department showed payrolls declined by 92,000, while the unemployment rate edged up to 4.4 per cent.
It represents the sharpest monthly fall in employment since October, when a federal government shutdown disrupted economic activity.
The figures also come amid wider economic uncertainty, with analysts warning that rising oil prices linked to tensions surrounding the US-Israel war involving Iran could weigh on global growth.
Job losses were recorded across nearly every sector, including healthcare, typically one of the most resilient sources of employment, posted declines after strikes disrupted services during the month.
Federal government employment also continued to shrink, with the Labor Department reporting that the sector lost a further 10,000 jobs last month.
Since peaking in October 2024, federal employment has fallen by about 330,000 positions, roughly 11 per cent of the workforce.
The department also revised down earlier figures for December and January, suggesting hiring had been weaker than previously reported.
Samuel Tombs, chief US economist at Pantheon Macroeconomics, said the latest data undermined suggestions that the labour market had begun to stabilise after a slow 2025, which marked the weakest year for job growth since the pandemic.
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“The idea the labour market has turned a corner implodes with this report,” Tombs wrote in a note following the release of the figures.
Financial markets reacted quickly, with shares on Wall Street slipping after the data was published.
The figures also placed renewed political pressure on US President Donald Trump, who campaigned on pledges to strengthen the economy.
Democrats moved swiftly to criticise the administration, with Senator Elizabeth Warren saying the figures showed the White House was “tanking the job market.”
Administration officials, however, played down the importance of the report.
Kevin Hassett, director of the National Economic Council, told CNBC he still expected strong economic growth to drive hiring in the months ahead.
“There will be so much activity that everybody is going to be able to find a job that wants one,” he said.
The data also complicates the outlook for the US central bank, the Federal Reserve. A weakening labour market would normally strengthen the case for cutting interest rates to stimulate the economy.
However, economists warn that a sustained rise in oil prices could fuel inflation, limiting the central bank’s room to act.
Ellen Zentner, chief economic strategist at Morgan Stanley Wealth Management, said the figures could place policymakers in a difficult position.
“Today’s numbers may have put the Fed between a rock and a hard place,” she said.