American Companies cut an unexpected 92,000 jobs last month, a sign that the US labor market is still under pressure. With this, the unemployment rate in the world’s most powerful country has increased marginally to 4.4 percent. According to the report released by the Labor Department on Friday, the recruitment situation in February was worse than in January. Companies, nonprofits and government agencies added 126,000 jobs in January. Economists had expected 60,000 new jobs in February.
Economic uncertainty caused by war with Iran
According to the revised data, 69,000 jobs have also been cut from the payrolls for December and January. This weak employment situation in February reflects the economic uncertainty created by the war with Iran. The war has sent oil prices soaring and burdened businesses and consumers with unexpected costs. “The job market is facing a lot of headwinds,” said Heather Long, chief economist at Navy Federal Credit Union. Companies would be hesitant to hire this spring until the war ended. This is a challenging time for the American economy.
The job market was affected due to Donald Trump’s tariff policies in 2025
In the year 2025, the job market was sluggish due to President Donald Trump’s tariff policies and high interest rates. After better appointments in January, there were hopes of improvement in 2026, but the latest report has jolted those hopes. According to Olu Sonola, head of US economics at Fitch Ratings, “Just when it seemed that the labor market was stabilizing, this report has dashed that notion.” This is bad news in every respect.
Worst scenario for monetary policy
Due to the war with Iran, the outlook of the job market and the entire economy is surrounded by clouds of uncertainty. “This is probably the worst-case scenario for monetary policy,” said Eugenio Aleman, chief economist at Raymond James. According to him, low hiring and rising inflationary pressures have created a very difficult situation for the Federal Reserve, where it will have to decide whether to cut interest rates to support the job market or keep them at current levels to rein in prices.
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