CNN
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US employers pulled back on their hiring plans last month, while layoffs in the federal government spiked to their highest level in more than four years, new labor market data showed Tuesday.
The latest Job Openings and Labor Turnover Survey data provided some glimpses of how President Donald Trump’s sweeping policies are upending a long-stable employer in the federal government and injecting uncertainty into the broader economy.
The number of job openings — a measurement of labor market demand — fell to 7.57 million in February, according to the Bureau of Labor Statistics’ JOLTS report released Tuesday. February’s total marks a retreat from January, when the number of available jobs rose to 7.76 million to begin the year.
Despite the drop in openings, overall labor market turnover held fairly steady in February, as the percentage of hires, layoffs and quits of total employment were unchanged. The level of layoffs did pick up from January to an estimated 1.79 million from 1.67 million, according to the report.
Unsurprisingly, the sector seeing one of the largest increases in layoffs was the federal government, which saw layoffs spike to 22,000 from 4,000 in January, marking the highest monthly total since November 2020.
The Elon Musk-spearheaded Department of Government Efficiency has stormed through federal agencies in recent weeks, quickly slashing jobs and cutting funding and programs.
Economists have warned that the early 2025 labor market data, which has shown slowing but solid job gains, was likely the “calm before the storm.” Trump’s fast-moving policy actions — including drastic workforce reductions within the federal government — are expected to ripple through the private sector, potentially stifling growth there and in the US economy as a whole.
“Federal layoffs are beginning to make their way into the data, and there’s more to come,” Elizabeth Renter, NerdWallet senior economist, wrote Tuesday. “Today’s data looks back to February, when layoffs began. The visibility of ongoing cuts will only become more apparent in the weeks and months ahead.”
She added: “Employers were already hiring fewer people coming into the year, and continued increasing uncertainty across the board economy will hold hiring at lower levels.”
FactSet consensus estimates show economists expected February’s job openings to drop to 7.625 million from 7.74 million.
Job openings declined across most industries, Tuesday’s report showed. However, the most notable upticks were in professional and business services, information and private educational services.
However — aside from gains seen in industries such as professional and business services, mining, and arts and entertainment — hiring activity was fairly unchanged for most sectors.
The churn that’s needed for a healthy labor market has slowed significantly in recent months. Businesses aren’t hiring as much, folks aren’t eager to quit, and those without jobs are staying on the sidelines for longer.
“It’s just kind of static,” Allison Shrivastava, an economist at the Indeed Hiring Lab, told CNN on Tuesday.
Businesses need strong signals about the economy in order to feel comfortable in hiring, investing and expanding, she said. However, in recent weeks, the messaging around tariffs has only added to uncertainty, she said.
The JOLTS report is the first in a line of critical pieces of economic data that will be released this week about the health and trajectory of the labor market, the paramount one being Friday’s jobs report.
Economists are expecting job gains to have slowed in March and forecast a net gain of 125,000 jobs for the month, according to FactSet estimates.
