New data released by the Bureau of Labor Statistics (BLS) on Tuesday paints a concerning picture of the U.S. labor market, revealing that private-sector hiring has plummeted to its slowest pace since 2010.

Worrying Decline in Job Creation Metrics

The last time hiring activity registered at such low levels was in April 2020, during the peak of the pandemic-induced economic shutdown. This latest report reflects a significant drop from the period following the Great Recession.

The BLS update to the Job Openings and Labor Turnover Survey (JOLTS) showed that gross hiring figures—which track both hiring and firing, distinct from net job reports—fell substantially.

Key Figures from the JOLTS Report

  • Private-sector hires dropped by 503,000 from January figures.
  • As a percentage of total employment, the private-sector hire rate fell to 3.3%, marking the lowest rate in 16 years.

When including the public sector, the total number of hires nationwide tumbled by nearly 500,000, reaching 4.8 million in February. This brought the overall hire rate down to 3.1%, the lowest recorded since the pandemic shutdown.

Sector-Specific Slowdown and Job Openings

Analysis indicates that the deceleration is widespread across various industries. Laura Ullrich of Indeed Hiring Lab noted the severity of the downturn.

"Hires rates have dropped across a number of sectors, with the most severe declines over the last year registered in the construction and professional business services sectors," Ullrich stated following the JOLTS release.

Job openings, traditionally a measure of labor market strength, also showed a marked decrease. Openings fell from 7.2 million in January to 6.9 million last month.

Job openings have been trending downward since they peaked in March 2022, having previously hit a recent low of 6.6 million in December.

Employee Confidence and Economic Context

The JOLTS report also tracked the “quits rate,” which measures the share of workers voluntarily leaving their jobs. This rate saw a slight dip to 1.9%.

This figure has remained relatively flat over recent months, suggesting that employees are currently choosing to stay put in their current roles rather than seeking new opportunities.

This labor market data was compiled prior to the escalation of the conflict involving the United States and Iran, which has subsequently caused energy prices to surge.

Impact of Rising Energy Costs

Gasoline prices have increased sharply since the conflict began, rising from under $3 per gallon a month ago to $4.01 as of Tuesday, according to AAA data.

Economists are voicing concern over these combined factors. Chris Rupkey, chief economist at FWDBONDS, warned about the implications of falling job listings coinciding with energy price spikes.

"Sharply lower job listings at the end of February as the Iran war started is not a good omen for the health and vitality of the labor market," Rupkey commented. He added that the economy is slowing, and it remains uncertain if this signals the onset of a recession.

Rupkey further cautioned that historical patterns suggest trouble ahead: "Every recession since the 70s has been preceded by a spike in energy prices, and it will be a miracle if the U.S. can miss a downturn this time around."