Labor Market and Economy Report: A Look at Trends in February 2026

Executive Summary

Job Growth

The U.S. economy lost 92,000 jobs in February. Employment in the healthcare industry, which has been the largest contributor to monthly employment growth for over a year, declined by 28,000 jobs amid strike activity. Severe winter weather and ongoing economic headwinds contributed to declines in other major sectors, including construction, leisure and hospitality, and manufacturing.

The Employment Situation Summary for February 2026, published by the U.S. Bureau of Labor Statistics, also disclosed data revisions that were made after the BLS incorporated updated Census population estimates into its household survey. The new population estimates reflected a historic decline in net international migration, fewer prime‑age men (ages 25–54), and an increase in women ages 65 and older. These adjustments increased the number of people not in the labor force by 1.2 million and reduced both the labor force and employment level by 1.4 million each. The adjustments also lowered the labor force participation rate by 0.4 percentage points and the employment‑population ratio by 0.5 percentage points, while leaving the unemployment rate unchanged.

Unemployment and Labor Force Participation

The unemployment rate increased from 4.3% to 4.4% in February, and the labor force participation rate was 62.0%.

Unemployment rates specific to the industries Aston Carter supports were as follows for February: finance and insurance (2.1%), professional and business services (4.6%), hospitals (1.8%), utilities (2.6%), manufacturing (3.3%) and construction (6.3%).

Among skilled labor categories Aston Carter sources talent for, unemployment in business and financial was 2.9%, and office and administrative was 4.2%.

Inflation

The year-over-year inflation rate increased by 2.4% between February 2025 and February 2026, essentially unchanged from January’s CPI.

Wage Growth

Average hourly earnings increased by 3.8% for the 12 months ending February. “Real” average hourly earnings (wages adjusted for inflation) increased by 1.4% between February 2025 and February 2026. In other words, average hourly earnings are keeping up with inflation, but consumers may still be feeling the pressure of higher prices.