April 7, 2025
Payroll employment climbed by 209 thousand in March after gaining 116 thousand in February and 79 thousand in January. The job gain far exceeded market expectations which were for an increase of 127 thousand.
In addition to hiring workers employers can also alter the length of the workweek for their existing workers. The nonfarm workweek was unchanged in March at 34.2 hours after having risen 0.1 hour in February. Prior to the recession the nonfarm workweek was averaging 34.4 hours so it is considerably shorter than it was five years ago. Firms are concerned about the impact of tariffs on the economy in the months ahead and fear a slowdown. They are not yet willing to lay off workers, but they are choosing to work their existing employees shorter hours. If this continues, it will translate into job losses later this year.
Job openings have fallen from a record high level of 11.7 million in early 2021 to 7.7 million. Prior to the recession there were about 7.0 million job openings per month versus 7.7 million currently. Today there are still 1.1 job openings for every unemployed worker which is roughly where this was prior to the recession. Employers are getting nervous and the labor market has softened, but on balance the labor market is doing reasonably OK for now.
The change in employment and hours worked are reflected in the aggregate hours index rose 0.2% in March to 116.6 after having risen 0.3% in February. The aggregate hours index rose 0.5% in the current quarter. We anticipate a GDP increase of about 1.5% in the first quarter. The cold weather and wildfires in California took a toll in January and employer uncertainty about the future economic outlook is accentuating the weakness.
Construction employment rose by 13 thousand. Manufacturing employment rose by 1 thousand. Retail trade jobs rose 24 thousand. Transportation and warehousing rose by 23 thousand. Info tech jobs declined 2 thousand. Financial sector jobs rose by 9 thousand. Professional and business services rose by 3 thousand.. Health care jobs climbed by 54 thousand. Social assistance gained 24 thousand. Leisure and hospitality jobs jumped by 43 thousand.(restaurant employment climbed by 30 thousand. Government jobs rose by 19 thousand. Federal government employment declined 4 thousand which puts it 15 thousand below its recent peak level.
We expect GDP to grow about 1.5% in the first quarter and 2.5% for 2025 as a whole.
Stephen Slifer
NumberNomics
Charleston, S.C.
NumberNomics
Charleston, S.C.
We have seen a change in the way companies are hiring employees. As the owner of the staffing company temp to hire has been a very popular strategy the last several years. Now companies are actually hiring people directly to their payroll and willing to pay fees. That would seem to indicate that they do not expect a downturn in the near future. Good news for all of us.
Thanks for the comment, Neil. From what you said, it certainly suggests that if they do expect a recession it will be short and mild and they will soon need those bodies. But what if rates really do need to go to 6% to slow things down enough to trigger the recession? The outcome may not be quite so mild. We will see.
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