The U.S. added 151,000 jobs in February with federal job cuts beginning to show. Private sector hiring slowed significantly amid policy uncertainty, while multiple-job holders reached the highest level since 2009.
Key Takeaways
- The U.S. economy added 151,000 jobs in February, with Dec/Jan revisions posting a net decline of 2,000 jobs
- Preliminary numbers show 10,000 Government job losses, with more expected in next month’s report
- Private sector employment gains fell 46% short of predictions amid economic uncertainty
- 5.27% of working Americans are taking on multiple jobs, the highest level since July 2009
U.S. Job Growth Holds Steady at 151,000
February marked another steady month of growth for the U.S. labor market, with 151,000 jobs added, while revisions to December and January resulted in a net decline of a minimal 2,000 jobs. The unemployment rate rose slightly to 4.1 percent and has remained between 4.0 and 4.2 percent since May 2024. In terms of sector growth, employment increased in healthcare (+52,000), financial activities (+21,000), transportation and warehousing (+18,000), and social assistance (+11,000).
The February jobs report marks the first month under President Trump’s second term. Still, the full impact of the administration's initial policy changes is not yet reflected in the survey findings.
Source: NYTimes
Government and Private Sector Seeing Slowdowns
Friday’s report did show a decline of 10,000 federal worker jobs, but these findings only provide a partial picture. February’s survey data was collected in the second week of the month amid Trump’s federal worker buyout and layoff plan. Current estimates show that close to 75,000 workers have accepted the buyout offer. Layoffs have been focused within the Internal Revenue Service, Department of Health and Human Services, U.S. Forest Service, Department of Agriculture, and the U.S. Agency for International Development (U.S.AID). More significant declines are expected in March’s report, set to be released by the BLS on April 4.
Source: Statista
While federal worker cuts have been grabbing headlines, ADP reports that private-sector employers added 77,000 jobs in February, just over half the 142,500 forecasted by economists. This hiring slowdown represents the lowest gain since last July and marks a considerable decrease from the 186,000 private sector jobs added in January. According to ADP's chief economist, Nela Richardson, policy uncertainty and consumer spending slowdowns were the primary drivers of this decline.
The Conference Board’s Consumer Confidence Index February report supports this opinion, with a sharp decline of 7.0 points measured over the month. This marks the third month of declines and is the most dramatic decrease since August 2021. Senior economist at The Conference Board, Global Indicators, Stephanie Guichard, asserted that factors like stubborn inflation and recent increases in the cost of household items like eggs drive much of this eroded sentiment. Also, the anticipated impacts of trade tariffs on everyday items lead to uncertainty and anxiety for consumers.
Proceeding with Caution
Looking ahead, the Employment Trends Index is predicting further slowdowns, with the ETI at its lowest level since October last year. The February index reading was driven by increases in five of the ETI’s eight indicators: (1) the number of Involuntary Part-Time workers, (2) the number of respondents indicating that jobs are hard to get, (3) initial unemployment insurance claims, (4) the number of temporary help employees, and (5) the number of firms not able to fill their roles right now.
Source: The Conference Board
Economic uncertainty is also reflected in Glassdoor’s recent Employee Confidence Index, which saw a dramatic downturn in February. Only 44.4% of workers reported a positive 6-month business outlook, down from 45.1% in January, with “layoff” mentions at their highest level since July 2020. Notable downturns were measured in Government roles and Manufacturing, where near-daily updates on tariff implications are putting workers on edge.
Retail (38.3%) and restaurant (38.1%) workers measured among the lowest confidence ratings. As a bright spot, restaurant workers saw a 2.7% improvement in confidence year-over-year. The highest confidence levels were recorded for Human Resources (59%), Real Estate (58.2%) and IT (55.3%).
Source: Glassdoor
Workers are definitely feeling the financial squeeze, as many have taken on multiple jobs to make ends meet, and as account for the uncertainty of relying on a single income. A recent analysis by Advisor Perspectives, found that the share of workers holding multiple jobs peaked during the last two recessions and reached 5.27% in February this year, the highest measured since July 2009.
Potential Rocky Road Ahead
Additional federal worker layoffs are expected, and with continued uncertainty from a policy perspective, many private-sector businesses have hit the brakes on hiring. The U.S. stock market has also responded to this uncertainty as the S&P took a dive this week amid retaliatory trade tariffs that many fear will drive up costs and stunt U.S. economic growth.
Now more than ever, employers should prioritize and solidify their employee value propositions and instill stability in their workers as the U.S. economy plays out on the world stage.
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