Last week, the Bureau of Labor Statistics (BLS) reported a 92,000 net loss in jobs for the month of February. This is in part due to labor strikes and record snow blizzards in some areas of the country. Although both of these factors were temporary, it does show a weakness in the labor market and in economic indicators.
The strike that impacted the February jobs report was a health care workers strike at Kaiser Permanente. It started on January 26 and ended on February 23 and affected 31,000 workers in California and Hawaii. This also came in the middle of another health care strike in New York City where 15,000 nurses were on strike for 41 days ending February 21. This had a huge impact on the private education and health services sector in February, which saw a decline of 34,000 jobs. Healthcare has consistently added jobs each month and is projected to continue to grow to accommodate the aging Baby Boomer population.
Another sector that saw large declines in employment was leisure and hospitality. The accommodation and food services sector, specifically, had the largest decrease at 34,700 jobs. This was the first negative month after seven consecutive monthly increases in accommodation and food services, likely affected by the winter storm that hit most of the country in February. Service industries are particularly susceptible to declines during inclement weather or other economic shocks, as they are directly reliant on consumer spending. If anything keeps consumers stuck at home, then people in service industries have less work.
With both of these factors happening at the same time, it signals that job growth relies on sectors that are volatile and consumer-focused. This has the possibility of overemphasizing when the economy is doing well, but it also becomes more shocking when the economy takes a slight downturn. As many jobs in healthcare and leisure are hourly, it takes a very short time for them to reflect any economic downturn or consumer hesitancy.
Unfortunately, because the monthly jobs report is so heavily relied upon as an economic indicator–even though a lagging indicator—any downturns in job growth are magnified. The bad news tends to distract from strong policy that can still impact Americans in a big way. For example, the One Big, Beautiful Bill would increase Americans’ take-home pay. Tax refunds are averaging 11% more this tax season. Further, falling mortgage interest rates mean lower median monthly mortgage payments; currently $2,675 instead of $2,800 a year ago.
A month of declining jobs gives us a balanced look at the economy, but it is important to look at the broader economic picture. Affordability policy could be a lot stronger, and there is much work for policymakers in terms of building the average household’s financial strength. There has still been good work done for the American worker.