The February Jobs Report Is Out & The Numbers Are Worse Than the Headline Suggests
But the headline number isn’t actually the worst part of this report… It’s the revisions.
December, originally reported as a gain of 48,000 jobs, was revised down to a loss of 17,000. That’s a swing of 65,000 jobs that the government said existed and didn’t. January was trimmed by 4,000, from 130,000 to 126,000. Combined, those two revisions mean we came into February already 69,000 jobs lighter than we thought. Layer in February’s 92,000 loss, and the sequential picture is considerably weaker than any single monthly headline would suggest.
The BLS noted the February decline was driven by three areas. Healthcare lost 28,000 jobs, almost entirely due to strike activity among physician offices, and will likely recover next month. The information sector shed another 11,000, continuing a steady 12-month decline. Federal government employment fell by 10,000, and since its peak in October 2024, federal headcount is down 330,000, a reduction of 11%.
On the wages side, there is at least one genuine bright spot. Average hourly earnings rose to $37.32, up 3.8% over the past year. If you have a job, your pay is holding up. The problem is that long-term unemployment, defined as people out of work for 27 weeks or more, now sits at 1.9 million, up from 1.5 million a year ago. That’s a 27% increase year over year, and it tells you that displaced workers are taking much longer to land back on their feet than they used to.
For additional context on where the broader job market stood heading into this report, yesterday’s episode covered the Challenger Job Cut Report, Revelio’s February workforce data, and Morgan Stanley’s layoffs, all of which pointed toward the same weakening trend this BLS report now confirms.
Small Businesses Are Hiring, But They Can’t Find the Workers They Need
The NFIB’s February Jobs Report tells a noticeably different story from the BLS data, and understanding why matters. The two reports measure different things. The BLS captures broad nonfarm payroll movement across the entire economy. The NFIB focuses specifically on small business sentiment and hiring activity, and that segment was largely insulated from the factors that drove February’s BLS decline.
NFIB’s Small Business Employment Index rose nearly a full point to 103.5 in February, sitting 3.5 points above its historical average and 2.3 points above the 2025 average. That’s a strong reading. Fifty-four percent of small business owners reported hiring or trying to hire last month, up four points from January.
The catch: 85% of those actively hiring said they found few or no qualified applicants. 33% reported job openings they simply couldn’t fill, up two points from January, with skilled worker shortages leading the way.
NFIB Chief Economist Bill Dunkelberg noted that while the overall market remains in balance, employers need more skilled workers to fill open positions. That skills gap, particularly in trades, CDL driving, and certain technical roles, is real and isn’t going away anytime soon. It’s also one of the clearest signals that how technology is changing hiring won’t solve every workforce problem. Some shortages are about human skill, not software.
There’s also a cost signal worth watching. A net 34% of small business owners raised compensation in February, the highest level since March 2025. That’s a positive for workers in those roles. Forward-looking hiring plans, however, pulled back, dropping four points to a net 12% planning to add staff in the next three months.
The honest read on the NFIB data is that small businesses are doing what they can to stay staffed, but they’re not expanding aggressively. They’re treading water, and in the current environment, that might actually be the right call. For companies struggling to find qualified candidates in a tight market, our staffing services are built for exactly this kind of environment.
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Frequently Asked Questions
The Bureau of Labor Statistics reported that U.S. nonfarm payrolls fell by 92,000 in February 2026, nearly reversing January’s revised gain of 126,000. The unemployment rate held at 4.4%, with 7.6 million Americans out of work. The report also included significant downward revisions to prior months, with December revised from a gain of 48,000 to a loss of 17,000.
Healthcare shed 28,000 jobs in February, primarily due to strike activity among physician offices, which alone accounted for 37,000 losses. Hospitals partially offset that with a gain of 12,000 jobs. Because the decline was strike-related rather than structural, healthcare employment is expected to rebound in the March report.
Federal government employment has declined by 330,000, or 11%, since reaching its peak in October 2024. An additional 10,000 federal jobs were lost in February 2026 alone.
The NFIB Jobs Report tracks employment sentiment and hiring activity specifically among small businesses, while the BLS Employment Situation report measures nonfarm payrolls across the entire U.S. economy. The two reports can diverge significantly because small businesses are often insulated from the sector-specific or government-driven shifts that move the BLS numbers.
Average hourly earnings are up 3.8% over the past year, which is good news for employed workers. But long-term unemployment, those out of work for 27 or more weeks, has risen 27% year over year to 1.9 million people. The labor market is absorbing displaced workers more slowly than it used to, meaning the people who need jobs the most are waiting the longest to find them.
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BLS February Jobs Report: The headline is bad, and the revisions are worse
Welcome back to cornering the job market. Today’s big story is the February jobs report that just dropped. The headline’s bad, and unfortunately, it only gets worse from there. I will break all of that down. Also, the NFIB small business jobs data was released. That tells a different story, so we’ll get into that too. But the big news, the bomb that was dropped this morning, is that payrolls in the U.S. fell 92,000 in February, and that all but reverses January’s gain of 126,000. Now, you may hear that number and ask, wait, wasn’t it 130,000 that we added in January? Yes, it was, but it was revised down, and it’s not the biggest revision, far from it. Now, unemployment ticked up to 4.4% from 4.3% in January. That means we have about 7.6 million Americans out of work right now.
And the BLS in the report says that unemployment didn’t change. Well, it did change. We have more people unemployed than we did before, and that is worth acknowledging. It’s not something just a gloss over. We’re heading in the wrong direction. Now, the December report, so big revisions, and I almost always just go to the bottom of the report now instead of looking at the headline because these revisions are becoming so commonplace and significant. December was originally reported as a gain of 48,000 jobs, and it was revised to a negative 17,000. That’s a swing of 65,000 jobs that never existed. The government said that they were added and they weren’t there at all. I mean, this is just unacceptable the way this continues to happen. And as I said, January was trimmed by 4,000 down from the original 130,000. So that’s a net loss of 69,000 jobs. We thought we had them. We don’t.
So we came into this month already in a bad way, and now we lost 92,000 jobs on top of it. So the sequential picture is considerably weaker than the headlines suggest, to say the least. And again, this pattern of the BLS saying one thing, getting all the headlines, we see the tweets, we see the quotes, and then quietly it’s revised, but it shouldn’t be quiet. Far from it. Someone needs to be held accountable for this. I can’t hold anyone accountable personally, other than communicate it and do my part to make sure everyone in the workforce knows what’s going on and isn’t fooled by these top-line numbers when they’re far from accurate. So just some some data from this report healthcare lost 28,000 jobs in February.
Now that seems alarming on the surface because healthcare is one of the few sectors doing well. And that number was mainly driven by strikes, uh, physician offices strikes. So it will probably reverse next month, and healthcare will get back on course. The information sector lost 11,000 jobs, and that continues what has been a steady 12-month decline. And the federal government shed more jobs, 10,000 in February. So since October 2024, the federal employment is down 330,000. That’s an 11% reduction. A lot of it’s intentional. That’s not really indicative of a struggling economy. How you feel about that, size of the government, that’s a different discussion altogether, but that’s certainly a trend that we’re seeing where the federal government is being downsized. No question about that.
Also, long-term unemployment, which are people who haven’t had a job in 27 weeks or more, that’s at 1.9 million up from 1.5 million a year ago. So that’s trending in a bad direction, too. That’s a 27% increase year over year. Now, if we want to look for a bright spot, average hourly earnings rose to 3732, and that’s up 3.8% over the past year. Wages holding up is good news if you have a job, but when long-term unemployment rises 27% in one year, that just means the market isn’t able to display uh absorb displaced workers the way it used to. I mean, that is undeniable right now. So people are eventually finding jobs, but it’s taking them a long, long time. So we’re in a very different labor market than we had just a couple of years ago. I’m certain everyone is well aware of that right now. If you’ve been paying attention at all, or if you’re in the labor market, which most of us are, um it’s just not a good, it’s not a good state of things.
And so it is important to acknowledge it, important to dig beneath the surface and be open and honest, be transparent about what’s going on. And unfortunately, that is just not good news right now. That’s reality.
NFIB: Small businesses are hiring but running into a skills wall
So we’ll move on to the NFIB report. We’ll try to find some slightly better news here. It tells a different story, but that’s because they’re measuring different things. The NFIB focuses specifically on small businesses, and their employment index rose in February to 103.5, which is up nearly a full point from January and three and a half points above their long-term historical average. So that’s a good thing. And if you want to know how to square that with the BLS data, it’s because they’re measuring different things, as I said. The BLS decline was concentrated in a few areas, at least for February. Healthcare, due to the strikes, federal government cuts, uh, those don’t affect small businesses at all, of course. That’s not going to be a factor in how they’re hiring.
And then the technology decline, a lot of small businesses won’t have full-time technical employees either. So you kind of see what’s going on in the in the data. But specifically, small businesses are looking to hire in certain areas where they are having trouble. I mean, that is something that is consistent with their reports each month. They are having a difficult time in skilled trades in certain areas where they just can’t find enough workers. 54% of small business owners reported hiring or trying to hire in February, which was up four points from January. That’s positive. But of those actively hiring, 85% said they found few or no qualified applicants. One of their members was quoted saying, Finding labor is the most pressing problem. Nobody wants a career, too much jumping around. Okay, that sounds like boomer talk to me. You know, kids these days don’t want to work anymore. Come on, I’m I’m not buying it.
And I I see this in the NFIB report each month that small businesses can’t hire. And yes, if you’re a small business, it is harder to hire than a household name, a big brand that lots of people want to work for. But there are things you can do about it. Look at your compensation, look at your culture, look at how flexible you are with your requirements. You can make adjustments. So before you cry wolf and say you can’t hire, um make sure you’re doing all of those things. Although, I will acknowledge there is a genuine skills gap right now: skilled trade, CDL drivers, certain technical roles. Those shortages are real. But again, small businesses need to work a little harder to attract the best candidates.
Uh the chief economist from NFIB, Bill Dunkelberg, said that while the overall market remains in balance, employers need more skilled workers to fill open positions. Yes, skilled trades, that’s a problem. It’s going to be for the foreseeable future. We know that too. Now, a good thing from this report 34% of the owners raised compensation in February. But unfortunately, uh collectively their hiring plans pulled back. So I interpret this report right now as these organizations are hiring where they need to or trying to hire where they need to. They probably should adjust some things to be able to get the candidates they need, but there is a shortage in certain areas. What I don’t see from this report is is unfortunately a lot of forward growth, a lot of plans to expand.
It’s almost like uh small businesses are just trying to stay where they are right now. And based on what we’re seeing with the overall job market as a whole, that’s probably a win. That’s the reality of the situation. So big news today, unfortunate news. I didn’t mention this earlier. We were actually expected to add around 60,000 jobs. So it’s a big, even bigger. The loss appears even bigger when you consider that. That we were expecting a net gain and said we had a huge net loss and were negative for the past couple of months. I mean, that’s that’s where this ends up. So I was hoping for the end of the week with good news. We saw some a bright spot with the ADP report earlier earlier this week showing that we added jobs. BLS says something else entirely. And when you consider the constant revisions, even though on the surface they said we lost 92,000 jobs, what’s it gonna be when it’s revised a month from now? We’ll find out. I’ll report it when it happens.
Fun fact: Why golf caddies can out-earn doctors
But before we close, here’s a fun fact for today. I’m in Orlando right now. The Arnold Palmer Tournament at Bay Hill is taking place. And in honor of that, here’s a fun fact that a caddy for a professional golfer can make more than many doctors with top caddies earning millions of dollars a year. You could be so lucky. How great would that be? So that is it for today. Enjoy your weekend. Thank you for listening. Please like, subscribe, share with anyone who might be interested, and I will talk to you next week.
