The U.S. labor market unexpectedly lost 92,000 jobs last month, pushing the unemployment rate to 4.4% and intensifying concerns that rising energy prices and geopolitical tensions could further strain the economy.
Economists had predicted the addition of 50,000 to 60,000 jobs, making the decline a sharp surprise for policymakers and financial markets. The report also revised previous payroll data downward by 69,000 jobs for December and January, reinforcing signs that hiring momentum has weakened.
"Just when it looked like the labour market was stabilising, this report delivers a knock-down blow to that view," said Olu Sonola, head of U.S. economics at Fitch Ratings. "It's bad news whichever way you look at it."
Job losses were spread across several sectors, suggesting the slowdown is not confined to a single industry.
Major declines included:
- Restaurants and bars: about 30,000 jobs lost
- Healthcare: roughly 28,000 jobs lost, partly tied to a Kaiser Permanente strike
- Manufacturing: about 12,000 jobs cut
- Construction: approximately 11,000 jobs eliminated
Financial firms were among the few sectors to add workers, creating about 10,000 positions.
The weak hiring data comes as the U.S. economy faces rising energy costs linked to the war involving Iran. Brent crude oil has climbed above $90 per barrel, raising concerns about broader inflation pressures through higher transportation and manufacturing costs.
Those developments present a difficult challenge for the Federal Reserve, which must balance slowing employment with the risk of accelerating inflation.
"Probably the worst scenario for monetary policy," said Eugenio Aleman, chief economist at Raymond James, describing the central bank's policy dilemma.
Businesses appear increasingly cautious about hiring as uncertainty builds across global markets and domestic demand.
"The job market is struggling in the face of so many headwinds," said Heather Long, chief economist at Navy Federal Credit Union. "Companies are going to be even more reluctant to hire this spring until the war ends and they can see consumers still spending."
The latest figures add to signs that the labor market, once a pillar of economic resilience, may be entering a period of slower growth as companies reassess expansion plans amid rising costs and geopolitical uncertainty.
