Skip to main content

Reviewing our February, 2025 Forecast

Early: Our February 2025 Unemployment Forecast

The February 2025 Employment Situation report from the Bureau of Labor Statistics (BLS) showed a total nonfarm payroll employment increase of 151,000 jobs and a stable unemployment rate of 4.1%. However, our forecast, as published on Impact Investing Online, still anticipates a worsening employment situation by March 2025. Below, we note how our early projection remains valid despite the Feb. BLS data.

Survey Timing and Lagging Indicators

The BLS employment survey captures data up to February 15, 2025. This means that recent economic developments, corporate layoffs, and market slowdowns that occurred in the latter half of February are not reflected in the reported numbers. Our forecast accounts for these expected deteriorations, which have yet to fully materialize in official statistics but are likely to be evident in the March report.

Sectoral Employment Trends and Declining Federal Employment

The February report shows job gains in health care, financial activities, transportation and warehousing, and social assistance. However, the federal government recorded employment declines, signaling potential fiscal tightening that could ripple into broader economic sectors. If this contraction continues, government-dependent industries, contractors, and adjacent sectors may see job losses accelerating into March.

Unemployment Rate Comparison: Forecast vs. Actual

While the overall unemployment rate reported in February was 4.1%, our forecast was, at 4.2%, close. We continue to anticipate significant shifts between demographic groups. Black unemployment is expected to rise by March, reflecting deeper labor market disruptions. For February. 2025, 139,000 more Black people were employed than we forecast. Note that White unemployment in February was 112,000 higher that our forecast.  We forecast 50,000 more Hispanic workers unemployed. The actual number of Asian unemployed was 81,000 lower than we forecast.

Indicators of Future Employment Contractions

  • Corporate Layoffs: Several major firms have announced restructuring plans and layoffs in late February, which will manifest in the March BLS report.

  • Consumer Demand Slowdown: Declining consumer confidence suggests reduced spending, leading to job reductions in retail, hospitality, and manufacturing.

  • Interest Rate Pressures: The Federal Reserve’s monetary policy remains restrictive, causing continued strain on businesses, particularly in sectors sensitive to borrowing costs.

Conclusion

Our forecast for March 2025 anticipates a rise in unemployment, particularly for White and Black workers, despite the February report showing relatively stable numbers. The lag in survey timing, combined with emerging economic pressures, suggests that employment conditions will deteriorate in the coming weeks. While the February data may give an impression of stability, forward-looking indicators signal a sharper labor market slowdown by March, aligning with our forecasted unemployment trends.

Popular posts from this blog

Kamalanomics: Home and Health

Vice President Kamala Harris recently unveiled her economic plan, which builds upon and expands several initiatives from the Biden administration while adding new elements aimed at addressing economic challenges faced by American families. Her plan, dubbed the "Opportunity Economy" agenda, focuses on lowering costs for essential goods and services, particularly targeting housing, healthcare, and groceries. Key Components: 1. Housing: Harris proposes constructing three million new homes to address the housing supply crunch, which is more ambitious than Biden's two-million-home plan. She also advocates for a $40 billion "innovation fund" to encourage local governments to find solutions to housing shortages and make it harder for investment companies to buy up large numbers of rental properties, which has driven up rent prices. (See: Comments to the CalPERS Board of Administration, July 15, 2024 on Housing and Environmental Investing.) 2. Healthcare: Expanding on B...

Maternal Health Financing Facility for Black Women: A Solution to an Urgent Problem

Maternal mortality is a significant issue in the United States, with Black women disproportionately affected. Research conducted by the Centers for Disease Control and Prevention (CDC) has shown that Black women are more likely to die from pregnancy-related causes than their white counterparts. However, the issue is not new, and despite the increasing amount of data available, the disparities have remained unaddressed for far too long.  Creative Investment Research (CIR) is among the organizations that believe there is a solution to the problem. Through our proposed impact investing vehicle , the Maternal Health Financing Facility for Black Women (MHFFBW), we aim to tackle the mortality gap and support Black women during childbirth, which will, in turn, benefit their communities. The Facility, based on legally binding financing agreements containing terms and conditions that direct resources to individuals and institutions capable of addressing supply-side conditions at the heart...

William Michael Cunningham on Impact Investing, Blockchain, and Crowdfunding

September 2018 - 10 Questions William Michael Cunningham on Impact Investing, Blockchain, and Crowdfunding Interview by Carly Schulaka WHO: William Michael Cunningham WHAT: Economist, impact investing specialist, founder of Creative Investment Research WHAT'S ON HIS MIND: “Any finance professional in the U.S. should learn how to create a blockchain.” 1. You are an economist, an inventor, and an impact investing specialist. I’ve heard you say: “True innovation happens in a way that is independent of monetary returns.” How does this statement influence your work? It’s really about finding an interesting problem and applying financial technology to solving that problem or to dealing with that problem. You know, the people who invented the alphabet didn’t do so to make money. They had an interesting problem—communication on both a local and a grand scale—and if you were to calculate the social return for the invention of that technology or technique, it’s almost infinit...