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A small one-handed axe. Good for splitting wood. Can be used to hack meat in a pinch.
In-game description

Harvesting Firewood Edit

The hatchet can be used to harvest sticks from branches, cedar firewood from cedar limbs and fir firewood from fir limbs. It can also be used to break down many wooden objects such as shelves and crates into reclaimed wood. It is also one of two items (the other being the hacksaw) necessary to cut down maple and birch saplings.

Harvesting Animals Edit

The hatchet can be used to harvest animal carcasses. The hunting knife is usually the most effective at this, but sometimes the hatchet is more effective. When the animal corpse is 100% frozen harvesting meat with the hatchet is faster.

Repair Edit

The hatchet can currently only be repaired using a whetstone as part of the bladed tool maintenance gameplay mechanic and requires no material input. However the whetstone itself cannot be repaired and loses 5% condition per repair (for a total of 20 uses), compared to 3% or so of hatchet condition restored. It is not a permanent solution and at some point a hand-made alternative will be needed.

Combat Edit

The hatchet cannot be manually ‘equipped’ as a weapon like the bow or rifle, it cannot be used as a weapon outside of a scripted event. The hatchet will lose condition if it is used in a struggle.

Tools
Craftable
Fishing Fishing tackleHookLantern fuelLine
Harvesting Improvised hatchetImprovised knifeSnare
Other Bear skin bedrollSurvival bowTorch
Non-craftable
Ammunition Flare shellRifle ammunitionSimple arrow
Fire starters AccelerantCardboard matchesFirestrikerMagnifying lensWood matches
Harvesting HacksawHatchetHeavy hammerHunting knife
Light FlareFlashlightStorm lantern
Repair Quality toolsRifle cleaning kitSewing kitSimple toolsWhetstone
Weapons Distress pistolHunting rifleStone
Other BedrollBolt cuttersCan openerJerry canPrybarMountaineering rope