February 2025 Jobs Report

The Highlights:

·       The unemployment rate ticked up to 4.1% in February from 4% in January. Meanwhile, average hourly earnings increased by 0.3% month-over-month, as anticipated.

·       Federal government employment declined by 10,000 in February though government payrolls overall (including state and local) rose by 11,000.

·       The number of job openings rose from December’s downwardly revised total (7.51 million) to 7.74 million.

Is economic uncertainty taking a toll on a job market that started slowing late last year?  Will tariffs spur more American investment in manufacturing, energy, services, etc. creating more new jobs?  Or will it simply add to inflation and slow the economy down? 

There are a few indicators that point to the possibility of weakness coming to the labor market. One area of concern is the U6 rate, which is the broadest measure of unemployment and includes workers who are working part-time and seeking full-time hours. In February, the U6 rate jumped 0.5% to 8.0%, the highest level since October 2021. The U6 / U3 (the more commonly cited unemployment rate) spread jumped to 3.9% which is the highest since June 2021. This could mean that there is slack in the labor market where talent exists but is not in demand by employers.

Historically, uncertainty ultimately turns out to be a good thing for contract staffing. 

Digging in a little, Leasure and Hospitality was down mostly because food service and drinking establishments lost -27,500 jobs.  Government hiring came in at one of the lowest levels in some time mostly because the federal government shed -11,000 jobs.

ADP noted a slowdown in small business hiring. 

Select Industry Breakdown

For a deeper dive….

·       A more encompassing measure of unemployment (U6) that includes discouraged workers and those holding part-time jobs for economic reasons remained at 8.0%.

·       Prime age labor force participation rate (ages 25-54) stayed even at 83.5%.

·       The overall labor force participation held was down .2% to 62.4%.  This is still .8% below the level of February 2020.

·       In February, average hourly earnings for all employees on private nonfarm payrolls rose by 10 cents, or 0.3 percent, to $35.93. Over the past 12 months, average hourly earnings have increased by 4.0 percent. In February, average hourly earnings of private-sector production and nonsupervisory employees rose by 9 cents, or 0.3 percent, to $30.89.

·       In February, the average workweek for all employees on private nonfarm payrolls was unchanged at 34.1 hours. In manufacturing, the average workweek remained at 40.1 hours, and overtime edged up by 0.1 hour to 2.9 hours. The average workweek for production and nonsupervisory employees on private nonfarm payrolls was unchanged at 33.6 hours.

·       APD reported that 77,000 jobs were added in February.

Source: ADP, BLS, CNBC, Fox News

https://www.bls.gov/news.release/archives/jolts_02092021.htm

https://www.bls.gov/news.release/empsit.nr0.htm

https://www.bls.gov/opub/mlr/2015/article/industry-employment-and-output-projections-to-2024.htm

JOB OPENINGS AND LABOR TURNOVER – JANUARY 2025

The number of job openings was little changed at 7.7 million in January, the U.S. Bureau of Labor Statistics reported today. Hires held at 5.4 million, and total separations changed little at 5.3 million.  Within separations, quits (3.3 million) and layoffs and discharges (1.6 million) changed little.

This release includes estimates of the number and rate of job openings, hires, and separations for the total nonfarm sector, by industry, and by establishment size class. This release also includes 2024 annual estimates for job openings, hires, and separations. Job openings include all positions that are open on the last business day of the month. Hires and separations include all changes to the payroll during the entire month.

Job Openings

The number of job openings was little changed at 7.7 million in January but was down by 728,000 over the year. The job openings rate, at 4.6 percent, changed little over the month. The number of job openings increased in real estate and rental and leasing (+46,000).

Hires

In January, the number and rate of hires were unchanged at 5.4 million and 3.4 percent, respectively.  Hires decreased in mining and logging (-6,000).

Separations

Total separations include quits, layoffs and discharges, and other separations. Quits are generally voluntary separations initiated by the employee. Therefore, the quits rate can serve as a measure of workers’ willingness or ability to leave jobs. Layoffs and discharges are involuntary separations initiated by the employer. Other separations include separations due to retirement, death, disability, and transfers to other locations of the same firm.

The number and rate of total separations in January were little changed at 5.3 million and 3.3 percent, respectively. In January, the number and rate of quits were little changed at 3.3 million and 2.1 percent, respectively. Quits increased in construction (+53,000) and in mining and logging (+6,000).

In January, the number and rate of layoffs and discharges changed little at 1.6 million and 1.0 percent, respectively. Layoffs and discharges decreased in mining and logging (-8,000).

The number of other separations changed little at 350,000 in January.

Establishment Size Class

In January, the quits rate increased for establishments with 1 to 9 employees, while the job openings, hires, layoffs and discharges, and total separations rates showed little change. For establishments with 5,000 or more employees, all rates showed little or no change.

December 2024 Revisions

The number of job openings for December was revised down by 92,000 to 7.5 million, the number of hires was revised down by 88,000 to 5.4 million, and the number of total separations was revised down by 187,000 to 5.1 million. Within separations, the number of quits was revised down by 102,000 to 3.1 million, and the number of layoffs and discharges was revised down by 102,000 to 1.7 million. (Monthly revisions result from additional reports received from businesses and government agencies since the last published estimates and from the recalculation of seasonal factors.)

Annual Levels and Rates

Consistent with BLS practice, annual estimates are published for not seasonally adjusted data each year with the January news release. For details about how these estimates are calculated, see the technical note.

In 2024, the annual average job openings level was 7.8 million, a decrease of 1.5 million from 2023. The annual average job openings rate was 4.7 percent in 2024, compared to 5.6 percent in 2023.

In 2024, the annual hires level was 65.3 million, a decrease of 5.1 million from 2023. Annual total separations decreased by 4.6 million in 2024 to 63.2 million. Annual quits decreased by 5.0 million in 2024 to 39.2 million and accounted for 62.0 percent of total separations. Annual layoffs and discharges increased by 402,000 in 2024 to 20.2 million and accounted for 31.9 percent of total separations. Annual other separations decreased by 5,000 in 2024 to 3.8 million and accounted for 6.1 percent of total separations.

The annual average hires rate for 2024 was 3.4 percent, down from 3.8 percent in 2023. The annual average total separations rate for 2024 was 3.3 percent, compared to 3.6 percent in 2023. The 2024 annual average rates for the components of total separations were 2.1 percent for quits, 1.1 percent for layoffs and discharges, and 0.2 percent for other separations.

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The Job Openings and Labor Turnover Survey estimates for February 2025 are scheduled to be released on Tuesday, April 1, 2025, at 10:00 a.m. (ET).