- by New Deal democrat
I described last month as “the month the birds came home to roost…. In particular, the *entire* gains over the past year were reduced from 584,000 to 181,000 - an average of only 15,000 jobs gained per month.”
Well, this month the nesting birds, to butcher Edgar Allen Poe, started screeching “recession.”
Below is my in depth synopsis.
HEADLINES:
- -92,000 jobs lost. Private sector jobs declined -86,000. Government jobs declined -6,000. The three month average declined to a puny +6,000.
- The pattern of downward revisions to previous months continued. December was revised downward by -65,000, and January was revised downward by -4,000, for a net decline of -69,000.
- The alternate, and more volatile measure in the household report, declined by -185,000 jobs. On a YoY basis, this series *DECLINED* -426,000 jobs, or an average of -35,000 monthly.
- The U3 unemployment rate rose 0.1% to 4.4%, which is where it was in December.
- The U6 underemployment rate declined -0.1% to 7.9%.
- Further out on the spectrum, those who are not in the labor force but want a job now rose by 166,000.
Leading employment indicators of a slowdown or recession
These are leading sectors for the economy overall, and help us gauge how much the post-pandemic employment boom is shading towards a downturn. These were mainly negative:
- The average manufacturing workweek, one of the 10 components of the Index of Leading Indicators, rose 0.1 hours to 41.5 hours, and is now down only -0.1 hour from its 2021 peak of 41.6 hours.
- Manufacturing jobs decreased by -12,000, the 11th decline in the last 12 months. It is now at a 3+ year low.
- Truck driving, which had briefly rebounded early in 2025, declined another -500.
- Construction jobs declined -11,000.
- Residential construction jobs, which are even more leading, rose 2,400, continuing the trend of stabilizing since last April.
- Goods producing jobs as a whole declined -25,000..
- Temporary jobs, which have declined by over -650,000 since late 2022, declined again this month, by -6,500, but remained above their post-pandemic low set last October.
- The number of people unemployed for 5 weeks or fewer rose 153,000.
Wages of non-managerial workers
- Average Hourly Earnings for Production and Nonsupervisory Personnel increased $.09, or +0.3%, to $32.03, for a YoY gain of +3.7%, its lowest YoY% gain since the pandemic. Nevertheless, this continues to be significantly above the YoY inflation rate.
Aggregate hours and wages:
- The index of aggregate hours worked for non-managerial workers declined -0.2%, and is up 1.2% YoY, about average for the past two years.
- The index of aggregate payrolls for non-managerial workers rose 0.1%, and is up 4.7% YoY, also about average for the past two years.
Other significant data:
- Professional and business employment declined another -5,000. These tend to be well-paying jobs. While this remains above its October low, it remains lower YoY by -0.4%, which in the past 80+ years - until now - has almost *always* meant recession.
- The employment population ratio declined -0.1% to 59.3%, vs. 61.1% in February 2020.
- The Labor Force Participation Rate declined -0.1% to 62.0% , vs. 63.4% in February 2020.
SUMMARY
As I wrote at the outset, this was a recessionary report, partly because of the monthly change, and partly because of the sideways to downward trend in employment it represents since last spring.
There were some bright spots, including another increase in the average manufacturing work week, and residential construction jobs, which like much other data in the housing sector, shows signs of “green shoots,” i.e., that the bottom is being or has been formed. The U-6 underemployment rate* also declined slightly. And hourly wages continued to increase at a good clip.
But the vast majority of leading and coincident indicators in the report were negative: manufacturing, construction, trucking, and temporary help employment all declined, as did the goods-producing sector as a whole. Total hours work declined, and it is almost certain that once we get the inflation report, we will see that real aggregate payrolls also declined. The employment/population ratio* and labor force participation rate* declined. Revisions continued to be negative, and the unemployment rate*, against expectations, increased slightly.
[*These figures come from the Household Survey and may have been affected by the annual revisions, which were delayed a month and were reported this morning. But they were applied to the January numbers, so the month over month changes should not have been affected.]
Finally, please note that these figures are from *before* the war with Iran and its affect on gas prices started - so be prepared for worse in the next several months.
To conclude by returning to my opening comments about birds coming home to roost: this month Main Street, in the form of jobs, laid an egg.