US Employment Report

US Employment Report

Total nonfarm employment rose by 151K in February (140K private and 11K public) after a 125K increase in January — a very weak start to the year (+276K in February 2025). This contrasts with gains of 341K a year earlier, 750K in 2023 after a post-pandemic recovery, 497K in 2020 (pre-lockdown), and an average of 409K for January - February in 2017 - 2019.

Fiscal tightening will negatively impact employment trends, particularly for federal employees, with risks of large-scale layoffs. At its peak in early 2024, the public sector (federal and state) was a significant job provider, creating up to 650K — 700K jobs per year.

The private sector is weakening in terms of job creation. After an uptick in late 2024 (due to expectations of tax cuts and deregulation) when 531K jobs were created in two months, the pace has slowed to 221K since early 2025 — an average 40% lower than the historical norm.

Over the last year, employment in professional and business services declined by 88K, marking the 18th consecutive month of negative annual trends. The turning point came in May 2023; since then, employment in the sector has fallen by 272K, despite steady economic growth of 600K - 800K jobs per year. The gap from the trend is more than 1.3 million jobs (instead of gaining 900K over 1.5 years, the sector lost 300K). Historically, declines in this segment have always coincided with economic crises or recessions.

Employment Analysis

Information and communications are also cutting jobs — down more than 150K from its November 2022 peak, a substantial 5% decline in total employment.

Manufacturing and construction are slowing significantly — adding just 78K jobs in the last 12 months, compared to expansion cycles that typically create 400K - 700K jobs annually.

Where are things improving? Only two sectors stand out:

  • Health care and social services are creating 900K jobs per year, accounting for nearly 60% of total employment growth, double the typical 400K - 600K norm.
  • Transportation, warehousing, and logistics are stabilizing, creating 150K jobs per year — close to normal levels.

Conclusion

In general, strongly growing sectors represent only 19% of total jobs, while shrinking or stagnant sectors account for 30% — shifting the balance toward job losses.

The overall report is weak, with increasing signs that the U.S. economy is cooling.

Table of contents
  1. Private Sector Job Trends
  2. Employment Analysis
  3. Conclusion