US Restaurants Cut 29,700 Jobs in February as Gas Prices Surge

U.S. restaurants shed 29,700 jobs in February, a sharp retrenchment for a sector that a Restaurant Business Magazine editor says is under strain, with operators facing rising costs and softening demand. The job cuts came as gas prices surged 11%, adding another direct cost pressure for restaurants that rely on deliveries, commutes and regional supply chains.

The job losses were widespread across the economy. Healthcare firms shed 28,000 jobs after a four-week strike by more than 30,000 nurses and other front-line workers at Kaiser Permanente in California and Hawaii. Construction companies cut 11,000 jobs, which likely reflects frigid weather. Factories cut 12,000 jobs and have now lost jobs in 14 of the last 15 months. Administrative and support services cut nearly 19,000 jobs and courier and messenger services almost 17,000, while financial firms added 10,000 jobs.

Wage figures showed some resilience even as hiring slowed: average hourly wages rose 0.4% from January and 3.8% from a year earlier. Still, economists had expected 60,000 new jobs in February, and hiring deteriorated from January when companies, nonprofits and government agencies added a healthy 126,000 jobs, the Labor Department reported. Revisions also cut 69,000 jobs from December and January payrolls, a reminder that labor-market momentum is fragile after employers added just 15,000 jobs a month in 2025.

Market economists reacted bluntly. "Just when it looked like the labor market was stabilizing, 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." Heather Long, chief economist at Navy Federal Credit Union, added, "The job market is struggling in the face of so many headwinds," and warned, "Companies are going to be even more reluctant to hire this spring until the war ends and they can see consumers still spending. It’s a tense time for the U.S. economy."

The surprisingly weak employment picture in February adds to economic uncertainty over the war with Iran, which has caused oil prices to surge and saddled business and consumers with unforeseen costs. For restaurants, the combination of an 11% jump in gas prices, softer demand and ongoing labor-market caution means thinner margins and more pressure on staffing decisions as operators weigh scheduling, hours and menu simplification to protect profitability.

With hopes for a 2026 rebound dented after revisions and February's underperformance, restaurant operators and district managers will be watching fuel costs, consumer traffic and regional staffing availability closely in the months ahead as they try to stabilize payrolls and preserve margins.