Labor Market and Economy Report: A Look at Trends in February 2025

Executive Summary

Job Growth

In February, the U.S. economy added 151,000 jobs, which was below expectations but still an improvement over January's revised gains of 125,000 jobs (down from the initially reported 143,000). Significant job growth was seen in healthcare (+52,000), financial activities (+21,000), transportation and warehousing (+17,800), and social assistance (+11,100). However, there was a notable decline in federal government employment, which decreased by 10,000 jobs.

Despite the ongoing announcements of new facilities and projects expected to generate more jobs, some companies are also implementing job cuts due to restructuring and cost-cutting measures. The increasing uncertainty in the macroeconomic environment, along with persistent financial challenges from high interest rates and costs, has led many companies to adopt a "wait-and-see" approach. Many may be holding off on significant investments or hiring decisions until conditions become clearer and more favorable. Consequently, this has led to varied levels of hiring activity within the industries Aston Carter supports.

Unemployment and Labor Force Participation

Between January and February, the unemployment rate saw a slight increase from 4% to 4.1%. Meanwhile, the labor force participation rate dropped from 62.6% to 62.4%, marking its lowest level since January 2023.

Unemployment rates specific to the industries Aston Carter supports were as follows for February: finance and insurance (1.9%) professional and business services (4.6%), hospitals (1.6%), utilities (1.1%), manufacturing (3.4%), and construction (6.3%). 

Among skilled labor categories Aston Carter sources talent for, unemployment in business and financial was 2.4% and office and administrative was 3.5%.

Inflation

Between February 2024 and February 2025, the year-over-year inflation rate rose by 2.8%, which is slightly lower than January's rate of 3%. "Core" inflation, which excludes the volatile categories of food and energy, increased by 3.1% year-over-year. This marks the lowest core inflation rate since early 2021, indicating a slight improvement.

Wage Growth

Over the 12 months ending in February, average hourly earnings rose by 4%, just slightly below January's increase of 4.1%. “Real” average hourly earnings (wages adjusted for inflation) increased by 1.2% between February 2024 and February 2025. This indicates that while wages are keeping pace with inflation, consumers may still be experiencing the strain of higher prices.