Jobs Outlook March 2025

• Job growth continued at a steady pace in February, with the US economy adding 151,000 jobs. While unemployment ticked up slightly, it remains near historically low levels.

• However, the headline figure comes with the caveat that much of the recent cuts to the federal workforce is not reflected in this month's report. Revelio Labs’ jobs posting data also shows that future federal hiring is likely to slow down considerably.

• Uncertainty surrounding looming economic policy shifts—especially tariffs—may lead many employers to delay hiring plans. With hiring levels already low, the labor market could be vulnerable to exogenous shocks out of Washington.

The US economy added a respectable 151,000 jobs in February, and the unemployment rate ticked up to 4.1%, although it remains near a historic low level. On the surface this news seems encouraging, but the headline figure must be taken with a grain of salt. Much of the federal job cutting implemented by the Trump administration in recent weeks came after the BLS’s survey period, and thus would not be reflected in this month's numbers.

Beyond the headline figures, there is plenty in the report to suggest that the labor market is cooling: the employment-to-population ratio decreased, the share of workers working part-time for economic reasons continued to rise, hours worked remained low, and wage growth showed signs of slowing.

Looking ahead, Revelio Labs’ jobs postings data suggests sustained, but relatively muted hiring going forward. Active job postings across the US economy have ticked up in the last two months, bouncing back from a seasonal dip around the holidays. Currently active job postings are hovering around the same levels they were last year, albeit well below their levels in 2022 or 2023.

On the bright side, most industries added job postings last month. The transportation industry continued to lead the pack, with stronger postings in recent months reflected in hiring in this month’s BLS report: transportation and warehousing added 18,000 jobs in February according to the BLS. Information, manufacturing, and management & admin. services also saw strong gains in postings.

Additionally, companies across the US continue to increase the number of postings looking for recruiting positions, which is something we have highlighted in recent research as a potential indication of labor market strength. as a potential harbinger of additional hiring, have also increased.

However, federal job cuts are likely to weigh on net job creation in the coming months. Many of the tens of thousands of probationary workers that were laid off, and numerous other federal employees thereafter, were labeled as employed in this month’s report. The Jobs Report shows a decrease of only 10,000 federal workers in February, an understatement of the magnitude of federal job losses surrounding DOGE layoffs and departures last month.

Looking at Revelio Labs’ proprietary job postings data, we see a sharp drop in active job postings on usajobs.gov, the primary platform for US federal government openings. Active postings on usajobs.gov are more than 40% below the level they were just a few months back at the end of 2024, with postings concentrated in veteran and Indian health services and military-related functions. Some agencies have seen postings drop to near zero, after President Trump issued a hiring freeze on his first day in office.

The federal government has been a key job creator over the past year, and these federal job cuts come at a time when hiring in general is weakening across the economy. In our monthly Workforce Digest report we have noted a pronounced slowdown in hiring, which will make the labor market and the broader economy more susceptible to exogenous shocks.

Uncertainty around economic policy, and especially the looming tariffs, will likely weigh on hiring in the coming months. Many companies may hold off on decisions on new investment and hiring as long as uncertainty persists.

As we noted last month, the risk calculation for the Federal Reserve’s dual mandate of price stability and full employment may be shifting. Tariffs are inherently inflationary, and if economic policy uncertainty leads companies to delay hiring, then this economic slowdown may outweigh the initial inflationary impact of higher tariffs. Softer price pressures and a weakening labor market may well lead the Fed to action. We are already seeing this possibility reflected in financial markets, as yields fall amid expectations of additional interest rate cuts this year.