February saw stable business activity and job creation. Here are the five things we learned from U.S. economic data released during the week ending March 7.
Job creation remained stable in February. Nonfarm payrolls grew by a seasonally adjusted 151,000, up from the 125,000 net job adds in January but less than half of December’s 323,000 gain. The latter two figures reflected Bureau of Labor Statistics revisions that lowered payrolls by a net 2,000. Private sector employers added 140,000 jobs, including 106,000 in the service sector. Industries with the largest payroll gains were health care/social assistance (+63,100), construction (+19,000), and transportation/warehousing (+17,800). Government payrolls increased by 11,000. Shedding workers were leisure/hospitality (-16,000), temporary help services (-12,300), and retail (-6,300). Average weekly earnings of $1,225.21 were up 3.4 percent from a year earlier.
Based on a separate survey of households, the unemployment rate edged up 1/10th of a percentage point to 4.1 percent. 385,000 people departed the labor force, with the labor force participation rate shrinking by 2/10ths of a percentage point to 62.4 percent. The 25-54 participation rate held steady at 83.5 percent. The median length of unemployment was 10.0 weeks, with 20.9 percent of unemployed people out of work for at least 27 weeks. The number of part-time workers desiring full-time work rose by 460,000 to 4.937 million. The broadest measure of labor underutilization (U-6 series) jumped a half percentage point to 8.0 percent.
Manufacturing activity (barely) grew in February. The Institute for Supply Management’s Manufacturing PMI shed 6/10ths of a point to 50.3. This was the second consecutive month in a row where the measure remained above 50.0, indicating an expanding manufacturing sector. Falling were components for new orders, production, and employment, while the inventories index improved. Ten manufacturing industries reported growth, led by petroleum/coal products, primary metals, and wood products. The press release noted that some companies reported experiencing “the first operational shock of the new administration’s tariff policy.”
The service sector grew again in February. The Services PMI added 7/10ths of a point to 53.5. The Institute for Supply Management measure has exceeded the growth/contraction threshold for eight months. Whereas the business activity/production measure slipped in February, those for new orders, employment, and inventories all improved. Fourteen service sector industries expanded during the month, led by finance/insurance, wholesale trade, and utilities. The press release noted “anxiety” over tariffs and concerns about the impact of reduced federal government spending.
Factory orders grew for the first time in three months in January. New orders for manufactured goods increased 1.7 percent to a seasonally adjusted $589.9 billion. The Census Bureau measure was up 3.5 percent from a year earlier. Orders for durable and nondurable goods were up 3.2 percent and 0.3 percent, respectively, with civilian aircraft driving much of the former’s rise. Shipments increased 0.4 percent to $592.1 billion for its third consecutive monthly gain. Shipments were 2.7 percent ahead of their year-ago pace. Both unfilled orders (up 0.2 percent to $1.400 trillion) and inventories (+0.1 percent to $863.7 billion) experienced modest increases.
The trade deficit swelled in January as imports surged in front of tariffs. Exports grew 1.2 percent to $269.8 billion, while exports rose 10.0 percent to $401.2 billion. The resulting trade deficit of -$131.4 billion had the Census Bureau and Bureau of Economic Analysis was up 34.0 percent from December. The goods deficit jumped $33.5 billion to -$156.8 billion, while the services surplus inched up $0.2 billion to +$25.4 billion. The former reflected dramatically higher imports of finished metal shapes, pharmaceuticals, cell phones, computers (and accessories), and telecom equipment. The U.S. had its largest goods deficits with China, the European Union, Switzerland, and Mexico.
Other U.S. economic data released over the past week:
- Jobless Claims (Week ending March 1, 2025, First-Time Claims, seasonally adjusted): 221,000, -21,000 vs. the previous week, +11,000 vs. the same week a year earlier). 4-week moving average: 224,250 (+7.6% vs. the same week a year earlier).
- Vehicle Sales (February 2025, Autos and Light Trucks, seasonally adjusted annualized rate): 15.999 million (+3.2% vs. January 2025; +2.1% vs. February 2024).
- Construction Spending (January 2025, Value of Construction Put in Place, seasonally adjusted annualized rate): $2.193 trillion (-0.2% vs. December 2024; +3.2% vs. January 2024).
- Productivity (2024Q4-Revised, Nonfarm Business Labor Productivity, seasonally adjusted): +1.5% vs. 2024Q3; +2.0% vs. 2023Q4.
- State Employment (December 2024, Nonfarm Payrolls, seasonally adjusted): Increased in 2 states and unchanged in 48 states and the District of Columbia vs. November 2024. Increased in 33 states and unchanged in 17 states and the District of Columbia vs. December 2023.
- Consumer Credit (January 2025, Outstanding Consumer Credit (Non-Real-Estate) Balances, seasonally adjusted): $5.007 trillion (+$11.1 billion vs. December 2024; -0.6% vs. January 2024).
- Beige Book
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What We Learned About the U.S. Economy Last Week 