Report on February 2025 Employment Data: Another Satisfactory Period, Potential Problems Ahead
The national labor market showed a decent job growth in February, with the total nonfarm payroll employment rising by 151,000, according to recent data. However, a significant slowdown in federal employment may be affecting the overall employment landscape.
Federal employment, excluding post office workers, averaged a gain of 6,400 jobs per month between July 2022 and March 2024. However, a rapid reversal in federal government hiring was evident towards the end of 2023, and it fell off a cliff last month, with a decrease of 10,000 workers. The total number of federal workers likely decreased more significantly due to data collection happening early in February.
This federal slowdown is showing signs of affecting state and local government hiring. Local government employment gains have fallen from an average of 36,000 jobs added per month between December 2023 and February 2024, to 18,000 in the past three months.
The private sector, on the other hand, continued to show resilience. Private sector employers added 169,000 jobs per month, on average, from December 2024 through February. Healthcare and social assistance accounted for 45% of the private sector's 140,000 job increase in February, with gains being broad-based, as 58% of all non-government employers added jobs last month.
Despite these positive signs, inflation remains high and may continue to rise, posing a challenge for unemployed individuals who are finding it tough to quickly find a job. The unemployment rate slightly increased to 4.1% in February, indicating a slight tightening in the labor market.
The anticipated soft economic landing continues to hang in the balance, and the market's ability to maintain its "business as usual" momentum will be tested. The full impacts of new policies, proposals, and abrupt reversals from the current administration will shape the official statistics.
However, it's important to note that there are no specific or detailed data available about the exact number or rate of job losses in the federal administrative sector from March 2024 to the current date, nor about the direct impact on employment in state and local governments. The market is dynamic, and these trends are likely to evolve as more data becomes available.
