The unemployment rate is a measure of the percentage of the total labor force that is unemployed but actively seeking employment and willing to work. It’s a key indicator of the health of the labor market and the economy. For example, an unemployment rate of 4.2% means that 4.2% of the people who are able and willing to work are currently without a job.
Nonfarm payrolls refer to the total number of paid workers in the U.S. excluding farm employees, government employees, private household employees, and employees of nonprofit organizations. This statistic is reported monthly by the U.S. Bureau of Labor Statistics and is a critical indicator of economic health. An increase in nonfarm payrolls typically signals economic growth and means more jobs creation.
Employment Situation – January 2025
Total nonfarm payroll employment rose by 151,000 in February, while the unemployment rate remained steady at 4.1%. Employment increased in health care, financial activities, transportation and warehousing, and social assistance. However, federal government employment declined.
The report includes data from two surveys: one measuring labor force status (like unemployment) and another measuring nonfarm employment, hours, and earnings by industry.
1) Household Survey Data
The unemployment rate stayed at 4.1%, with 7.1 million people unemployed. The rate has been between 4.0% and 4.2% since May 2024. Long-term unemployment (27 weeks or more) remained at 1.5 million, accounting for 20.9% of all unemployed people. The employment-population ratio slightly decreased to 59.9%, and the labor force participation rate was unchanged at 62.4%.
The number of people working part-time for economic reasons increased by 460,000 to 4.9 million, indicating they wanted full-time work but couldn’t find it. Additionally, the number of people not in the labor force who wanted a job rose by 414,000 to 5.9 million. Among them, 1.7 million were marginally attached to the labor force, meaning they wanted and were available for work but hadn’t looked for a job recently. The number of discouraged workers, who believe no jobs are available for them, decreased by 128,000 to 464,000.
2) Establishment Survey Data
Nonfarm payroll employment grew by 151,000 in February, matching the average monthly gain over the past year. Health care added 52,000 jobs, with significant gains in ambulatory health care services, hospitals, and nursing and residential care facilities. Financial activities saw an increase of 21,000 jobs, particularly in real estate, rental and leasing, and insurance. Transportation and warehousing added 18,000 jobs, with strong growth in couriers and messengers and air transportation. Social assistance employment rose by 11,000 jobs.
Federal government employment declined by 10,000 jobs.
Average hourly earnings for private nonfarm employees increased by 0.3% to $35.93, and for production and nonsupervisory employees, it rose 0.3% to $30.89. The average workweek for private nonfarm employees stayed at 34.1 hours, while the manufacturing workweek remained at 40.1 hours with a slight increase in overtime to 2.9 hours. The average workweek for production and nonsupervisory employees also remained unchanged at 33.6 hours.
Impacts of Report on Stock Market
The February 2025 job report had a mixed impact on the market. The increase of 151,000 jobs was less than expected, and the unemployment rate stayed at 4.1%. This created some uncertainty among investors, making the stock market fluctuate.
For the S&P 500 (SPX), the report led to a cautious mood. While job growth in areas like health care, financial activities, and transportation was good, the overall slower job growth and steady unemployment rate made investors worry about the strength of the economic recovery.
