The federal government also experienced a dramatic increase in layoffs. The figures jumped from 4,000 in January to an unimaginable 22,000 in February. This surge represents the largest monthly total of federal job cuts since November of 2020. Layoffs recently hit a record high, in part due to efforts by the state’s Department of Government Efficiency. Led by Elon Musk, this agency is on the warpath, firing thousands of workers and decimating funding for successful grant and loan programs.
As with January, February saw a sharp drop in job openings in nearly every industry as well. Economists had predicted that job openings would drop from January’s high of 7.74 million. They had previously lowered it down to 7.625 million as of February, per FactSet consensus estimates. The real number fell to 7.57 million. That’s a decline from January’s record high of 7.76 million job openings.
The wider labor market was equally unstable. Cumulative layoffs across all sectors climbed to an estimated 1.79 million in February, compared with 1.67 million in January. Labor market pouring fluid into the leaky bucket increased, but stayed close to the bottom line. The hires, layoff, and quit rates as a share of employment remained steady over the month.
One phenomenon that economists are particularly focused on is a slowdown in labor market churn in recent months. Giant federal layoffs are just beginning to appear in the national data sets, warned Elizabeth Renter, a senior economist at NerdWallet. She sounded the alarm that more cuts are still to come.
“Federal layoffs are beginning to make their way into the data, and there’s more to come,” – Elizabeth Renter, NerdWallet senior economist.
Indeed Hiring Lab economist Allison Shrivastava characterized today’s employment landscape as one that’s “frozen.” Yet in reality, this characterization ignores the harsher current reality for job seekers, with layoffs on the rise and opportunities rapidly drying up.
Given all this, March should continue the trend of significant slowing in job growth. FactSet estimates are betting on a weak 125,000 net new jobs for the month. This shows that volatility in the labor market seems to still have a strong foothold. Economists across the spectrum seem to be united in their belief that the rate of job growth has decelerated from recent months.
These trends have dire consequences for workers and business owners. As the federal government enters this difficult time, the effects are more pronounced. Today, workers increasingly experience insecurity and lack of control over their employment, as do organizations with the rapid changes in the labor pool.