Key takeaways:
- Payrolls fell for the first time in months: BLS reported nonfarm employment dropped by 92,000 jobs in February, driven largely by strike-related losses in health care and continued federal government downsizing, while December was revised down sharply to -17,000.
- Private sector hiring improved but remained concentrated: ADP showed private employers added 63,000 jobs, the strongest showing since November 2025, with education and health services and construction leading growth, while professional and business services shed 30,000 jobs.
- Labor market indicators reflect growing strain: Unemployment edged up to 4.4%, long-term unemployment held near historic highs at 1.9 million, and the pay premium for job-changers hit a record low.
Total nonfarm payroll employment fell by 92,000 jobs in February, according to the latest report from the Bureau of Labor Statistics (BLS). The decline follows a January gain of 126,000 (revised down from 130,000) and marks a sharp reversal driven by two familiar headwinds: strike activity in health care and ongoing federal workforce reductions. December was revised down by 65,000 to -17,000, meaning employment in December and January combined is 69,000 lower than previously reported.
Health care employment fell by 28,000 in February, almost entirely due to strike activity that pulled 37,000 jobs from offices of physicians alone. Federal government employment continued its long decline, shedding another 10,000 jobs in February.
Temporary help services lost 6,500 jobs in February, but the longer trend is harder to ignore than any single month’s number. The sector shed 14,100 positions in December alone before a brief uptick of 2,500 in January, only to fall again in February. The broader professional and business services category was essentially flat at -5,000 last month.
Other highlights from the latest BLS report include:
- The unemployment rate held at 4.4%, with 7.6 million people unemployed, little changed from January.
- The labor force participation rate edged down to 62.0%, and the employment-population ratio declined slightly to 59.3%.
- Part-time employment for economic reasons dropped by 477,000 to 4.4 million, a notable improvement suggesting fewer workers are stuck in involuntary part-time roles.
- Long-term unemployment (27 weeks or more) remained elevated at 1.9 million, accounting for 25.3% of all unemployed people, up from 1.5 million a year ago.
- Average hourly earnings rose 15 cents to $37.32, contributing to a 3.8% gain over the past 12 months.
Private employment adds 63,000 jobs
ADP’s National Employment Report showed private sector employment increased by 63,000 jobs in February, the best monthly figure since November 2025 and a notable step up from January’s revised total of 11,000. The gains were real, but they came from a narrow slice of the economy.
“We’ve seen an increase in hiring and pay gains remain solid, especially for job-stayers,” said Dr. Nela Richardson, chief economist at ADP. “But with hiring concentrated in only a few sectors, our data shows no widespread pay benefit from changing jobs. In fact, the pay premium for switching employers hit a record low in February.”
When job-changers no longer earn a significant premium over job-stayers, the incentive to move (and the pipeline of active candidates) shrinks. February’s data put job-changer pay growth at 6.3%, down from recent levels, while job-stayers saw 4.5% growth. The gap between the two is the narrowest on record.
February’s private gains were driven by education and health services (+58,000) and construction (+19,000). Professional and business services was the biggest drag, losing 30,000 jobs, while manufacturing shed another 5,000.
