Labor Market by the Numbers
The big number: The unemployment rate increased to 3.9%, with the number of unemployed Americans increasing from 6,124,000 to 6,458,000. This is the highest monthly unemployment rate since January 2022 (4%).
Job postings: There were 622,000 manufacturing job openings in January, with 8,863,000 nonfarm business job openings. Both remained above pre-pandemic levels.
- While this is down from pandemic highs, this is the most manufacturing job openings since April 2023 (647,000).
- For every 100 job openings in the U.S. economy, there were 69.1 unemployed workers.
- As such, there continued to be significantly more job openings than people actively looking for work, even as that ratio narrowed notably in 2023. (It was nearly a 2-to-1 ratio one year ago.)
- The number of manufacturing quits decreased to 224,000 in January. After revisions, the number of manufacturing quits in December registered 233,000. This is a sign that churn, which has been a major issue for manufacturers amid a tight labor market, is continuing to decrease but remains a challenge. Quits averaged 203,000 per month pre-pandemic (2017-2019).
Manufacturing employment: Manufacturing employment declined by 4,000 in February, declining for the first time since October 2023. Job growth in the sector remains sluggish on a month-by-month basis, yet still remains well above pre-pandemic levels with 12,964,000 manufacturing employees in February 2024. Pre-pandemic (2017-2019) the sector averaged 12,648,000 employees per month.
- The average hourly earnings of production and nonsupervisory workers in manufacturing rose 0.5% to $27.31 in February, with 5.7% growth over the past 12 months. As such, wages continue to rise strongly despite softer hiring over the past year.
- Manufacturers continue to cite workforce challenges as their top concern.
Nonfarm payrolls: Nonfarm employment jumped to 275,000 in February, building on a downwardly revised 229,000 in January and exceeding consensus expectation of 198,000. February’s report came in above the average monthly gain of 230,000 over the prior 12 months
- The labor force participation rate was unchanged for February at 62.5% for the third straight month, down from 62.8% in November.
Key takeaway: The continued strong labor market data show that the U.S. economy is very resilient yet beginning to show some signs of weakening with unemployment rising. However, job and wage growth continues to be strong, and employment in the manufacturing sector remains well above pre-pandemic levels.
