Bank of America Institute Employment Report: February 2026

Key takeaways:

 • Payrolls growth accelerated to 1.3 percent year-over-year (YoY) in February, according to an estimate of payrolls based on Bank of America customer account data.

At the same time, the growth in the number of households receiving unemployment benefits has flattened out. Overall, the impression is of a strengthening labor market in the early months of 2026.

• But there is a more concerning picture in Bank of America customer account data on after-tax wages and salaries.

In particular, while higher-income wage growth rose to 4.2 percent YoY in February, lower- and middle-income wage growth slowed, to 0.6 percent and 1.2 percent YoY, respectively.

The gap between higher-income wage growth and other cohorts is the largest it has been since the beginning of Bank of America’s data series.

• One reason for cooling wage growth amongst lower- and middle-income households may be weaker pay raises when changing jobs.

In Bank of America internal data, the pay raise associated with a job change was 6.7 percent in January, down from the 2025 annual average of 8.6 percent and the double-digit gains during the "Great Resignation" period.