US Nonfarm Payrolls Decline Sharply in February

US Nonfarm Payrolls unexpectedly declined by 92K in February, compared with a downwardly revised increase of 126K in January, while economists had anticipated a gain of 50K.

The unemployment rate rose to 4.4% from 4.3% in January, exceeding the 4.3% forecast, while average hourly earnings increased by 0.4%, matching the pace recorded in the previous month.

The sharp slowdown in hiring alongside a rise in unemployment heightens concerns about a further weakening of the US labor market, complicating the Federal Reserve’s policy outlook at a time when oil prices have surged and inflation risks are intensifying.

Nonfarm payroll growth has been trending lower since April 2025, with February’s decline representing the second-largest drop during this period, when the labor market was already under pressure from the impact of President Trump’s import tariffs.

Downside risks to the labor market are expected to persist, as the administration introduced additional tariffs after the US Supreme Court invalidated the previous tariff packages, while the escalating conflict in the Middle East is also likely to weigh on economic activity.