February 2026 Market Trends Report
After a promising January jobs report, the labor market dwindled in February with losses spread across most industries. Retail and wholesale trade, financial activities, utilities and other services were the only industries to add jobs, significantly undercutting expectations for a broader labor market rebound.
The Bureau of Labor Statistics reported a net loss of 92,000 positions, contributing to declines in four of the past nine months after revisions.
Employee layoffs and discharges remain elevated, hovering around 1.7 million and 1.8 million per month from June 2025–December 2025 (the most recent data reported). This makes 2025 the worst year for layoffs and the weakest year for employment growth since the pandemic.
Unemployment is still historically low, creeping up slightly to 4.4% (from 4.3% in January). However, labor market weakness appears increasingly entrenched as job losses broaden and separations increase.
Jobs Market Overview: February 2026
4.4%
Overall unemployment rate
Unemployment increased slightly, sitting between a post-pandemic low of 3.4% in April 2023 and a high of 4.5% in November 2025.
-92k
Jobs lost
After January saw the strongest job growth in months, the market downshifted as employers cut positions across most job categories.
62%
Labor force participation rate (LFPR)
Labor force participation decreased to 62% (compared to 62.5% in January).
Industry Employment Trends
OVERALL ECONOMY
-92k
Monthly job change
(+156k year over year)
| Industry | Monthly Job Change | YOY Difference |
| Manufacturing | -12k | -98k |
| Automotive | -1.6k | -29.9k |
| Warehousing & Storage | +2.3k | -48.7k |
| Architectural & Engineering | +1.5k | +35.2k |
| Construction | -11k | +42k |
Source: Bureau of Labor Statistics' Economic News Release
Construction Outlook
“Almost nothing about this year feels business as usual for construction organizations. Tariff volatility continues to disrupt material pricing and planning efforts, making it increasingly difficult to forecast project costs and labor needs.
Savvy organizations are approaching fixed-price contracts with caution as unpredictable prices could erode already thin margins.
With many variables in flux, a stable staffing partnership is a much-needed foundation to regain cost control, adapt to schedule and scope changes, and bid projects with greater confidence.”
Joshua Miles
Business Development Manager and Construction Divisional Lead
Sector-by-Sector News: February 2026
Construction Jobs Report
Month-over-month jobs change: -11,00
Year-over-year jobs change: +42,000
Construction employment lost momentum in February, with 11,000 jobs cut after a strong 33,000 job gain in January. Declines spread across both residential and nonresidential construction, with employment growth limited to building segments.
Despite the slowdown, six-month seasonally adjusted growth stands at 70,000 jobs, ranking construction second (after private education and health services) among industries for hiring strength, despite ongoing market challenges.
Tariff uncertainty has made it difficult to estimate project costs, narrowing profit margins and prompting contractors to seek new supply chain and labor strategies.
On top of unpredictable material delivery schedules and costs, labor force planning is also difficult, prompting organizations to adopt flexible workforce models that allow rapid scalability when supporting large projects.
Warehousing & Storage Jobs Report
Month-over-month jobs change: +2,300
Year-over-year jobs change: -48,700
February Logistics Managers' Index: 61.5*
*A reading above 50 indicates logistics are expanding.
The LMI (Logistics Managers’ Index) had another strong reading, continuing its reversal of a long downward trend. The index ascended 1.9 points to 61.5. Inventory levels are still growing, but at a slower rate than last year when warehouses stockpiled inventory to evade incoming tariff hikes.
For now, the tariff environment is as uncertain as last year. “The way supply chains have adapted to this uncertainty is nothing short of impressive,” LMI reported. Companies are continuing to optimize cash flow by different means. In 2025, warehouses built inventory to avoid tariff impact. In 2026, it appears the strategy is to keep inventory levels low to support cost control efforts.
Looking ahead, respondents cited measured optimism, expecting transportation prices to remain strong and capacity to stay tight. While they’re confident in demand, concern remains around labor availability, tariffs and surging prices.
Manufacturing Jobs Report
Month-over-month jobs change: -12,000
Year-over-year jobs change: -98,000
January Manufacturing PMI: 52.4%
*A PMI reading above 50% suggests economic activity is expanding.
Manufacturing activity expanded for the second time in a row after an extended downturn of nearly uninterrupted contraction since November 2022.
Institute for Supply Management (ISM) reported a February PMI of 52.4%, dipping slightly from 52.6% in January, yet continuing momentum across:
- New Orders: 55.8% (↓1.3% MOM)
- Production: 53.5% (↓2.4% MOM)
- Backlog of Orders: 56.6% (↑5% MOM)
Backlog of Orders is expanding at a faster rate than last month, indicating continued demand that’s outpacing production capacity.
Even as orders and production expand, manufacturers remained cautious about hiring, shedding 12,000 jobs month over month and 98,000 year over year.
It appears that market uncertainty and automation investments have impacted hiring strategies. While there is less need for higher volumes of light industrial roles, demand is increasing for skilled workers who can operate and maintain advanced equipment.
After a significant multi-year slump, the past two months of data show a tentative recovery. More time is needed to secure a full-scale turnaround.