Is This the Last ‘Normal’ Jobs Report?
If you’re someone who pays close attention to the jobs data from the labor department, you’ve been holding your breath waiting for this month’s report. Would mass layoffs at federal agencies begin to show up in the government’s tally?
The answer to that question is: not yet. Although the February jobs report did show a decline of 10,000 jobs in federal employment, most job cuts won’t show up until next month’s report or even later, depending on court decisions.
The public and private sectors added 151,000 jobs last month. That’s slightly lower than the 160,000 jobs expected by economists, but not far off. However, there were indicators that the job market is faltering, including a big increase in the number of workers who held part-time jobs but wanted to work full-time (up 460,000).
What is clear from the jobs report is that the economy is no longer booming from a worker perspective. But if you’ve been reading this newsletter, you know that we think that hasn’t been the case for a while, regardless of what the top-line data seemed to say. Workers in tech, information, and professional services have been feeling the pinch for months.
The next question is: how much worse will it get, once newly unemployed government workers hit the job market?
What Experts Are Saying
“The report was the first under President Donald Trump's watch. The Trump administration's back-and-forth trade policy was making it hard for businesses to plan ahead, economists said. Business and consumer confidence have plunged since January, erasing all the gains notched in the aftermath of Trump's election victory in November.” –Lucia Mutikani, Reuters
“As a taste of what we may see in the coming months, the outplacement firm Challenger, Gray and Christmas clocked 172,017 layoffs last month, concentrated among federal agencies. That’s the highest number it had seen since July 2020, in the middle of the pandemic.” –Lydia DePillis, The New York Times
"It appears the administration wants to cut even more workers, but an order to fire the roughly 200,000 probationary employees was blocked by a federal judge. It remains to be seen how many more workers will lose their Federal Government roles." –Challenger, Gray & Christmas at CNBC
“The slowing pace of employment growth squares with the job openings data for January, which dropped sharply. The job openings rate has been moving sideways recently after dropping precipitously, but the contraction of federal government hiring may push it lower.” –Lydia DePillis, The New York Times
“Another emerging pressure point is a sharp rise in underemployment. The number of people who are working part-time because they can’t find full-time work surged by 460,000, the biggest jump in years. This suggests that while jobs are being added, many of them may not be stable, high-quality positions.” –Thomas J. Thompson, Chief Economist at Havas, on LinkedIn
“There are things happening in the labor market now that aren’t in the hard economic data yet. While we know the unemployed have had a more difficult time finding work over the past several months relative to a few years ago, this discomfort is sort of par for the course in a cooling labor market…. Now, however, in addition to federal layoffs, businesses are likely weighing hiring decisions against their expectations of the economy for the next several months. And indicators suggest growing uncertainty could warrant these decisions being more cautious.” –Elizabeth Renter, Senior Economist at NerdWallet, on LinkedIn
“Comments from a member of President Trump’s cabinet have renewed concerns that the new administration could seek to interfere with federal statistics, possibly including the monthly jobs report. In an interview on Fox News on Sunday, Commerce Secretary Howard Lutnick suggested that he planned to change the way the government reported data on gross domestic product to remove the impact of government spending.” –Ben Casselman, The New York Times
Just Give Me the Data, Please
The Employment Situation Summary by the numbers:
Total nonfarm employment: +151,000 jobs
Unemployment rate: 4.1%
Long-term unemployed: 1.5 million
Labor force participation rate: 62.4%
Employment-population ratio: 59.9% (-0.2 percentage point)
People employed part-time for economic reasons: 4.9 million (+460,000)
Average hourly earnings: Increased 10 cents (0.3%) to $35.93
Industries that added jobs:
Healthcare (+52,000 jobs)
Financial activities (+21,000 jobs)
Transportation and warehousing (+18,000 jobs)
Social assistance (+11,000 jobs)
Industry that lost jobs:
Federal government (-10,000 jobs)
Retail trade (-6,000 jobs)
Industries that remained flat:
Mining, quarrying, and oil and gas extraction
Construction
Manufacturing
Wholesale trade
Information
Professional and business services
Leisure and hospitality
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