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

Executive Summary

Job Growth

The U.S. economy added 151,000 jobs in February, falling below expectations again. Still, February’s employment gains exceeded January’s gains, which were revised down by 18,000, from +143,000 jobs to +125,000 jobs. In February, notable gains occurred in healthcare (+52,000), financial activities (+21,000), transportation and warehousing (+17,800) and social assistance (+11,100), while notable declines occurred in federal government (-10,000).

Other industries Actalent supports experienced the following job growth and loss last month: aerospace and defense (-4,500), architecture and engineering (+3,200), automotive (+8,900), construction (+19,000), manufacturing (+10,000), scientific research and development (+400), and utilities (+1,300).

While many companies continue to announce new facilities or new projects that are anticipated to create more jobs, others have announced job cuts related to restructuring and cost-cutting initiatives. Mounting uncertainty in the macroeconomic environment, coupled with ongoing financial difficulties from high interest rates and costs, has left many companies in a “wait-and-see” mode, awaiting clarity and improved conditions before making further large investments or hiring decisions. This has resulted in mixed levels of hiring activity within the industries Actalent supports.

Unemployment and Labor Force Participation

The unemployment rate increased slightly from 4.0% to 4.1% between January and February. The labor force participation rate fell from 62.6% to 62.4%, reaching the lowest rate since January 2023.

Unemployment rates specific to the industries Actalent supports were as follows for February: hospitals (1.6%), utilities (1.1%), professional and technical services (3.2%), manufacturing (3.4%), and construction (6.3%). 

Among skilled labor categories Actalent sources talent for, unemployment in software-IT-mathematics was 2.7%; architecture and engineering was 1.3%; and sciences (life, physical and social) was 2.1%.

Inflation

The year-over-year inflation rate increased by 2.8% between February 2024 and February 2025, slightly below January’s reading of 3.0%. “Core” inflation — the consumer price index for all items minus food and energy (two volatile categories) — increased by 3.1% year-over-year. This is the lowest core inflation rate since early 2021, suggesting slight improvement.

Wage Growth

Average hourly earnings increased by 4.0% for the 12 months ending February, only 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. In other words, average hourly earnings are keeping up with inflation, but consumers may still be feeling the pressure of higher prices.