Where the Jobs Are (and Aren’t): Understanding US Labor Trends

Many key indicators of the labor market’s vitality support a clean bill of health for the U.S. economy through the first quarter of 2025.

However, SHRM Senior Labor Economist Justin Ladner said it’s unclear how employment will be affected by policy shifts announced by the Trump administration, including grant cuts, executive orders, tariffs, and changing priorities around contractors and other government-funded positions. In a session at SHRM Talent 2025 in Nashville, Ladner noted that current metrics may not fully capture the market’s volatility, as labor statistics are lagging indicators.

Ladner shared a mix of good news and bad news with Talent 2025 attendees seeking to understand recent trends in the U.S. labor market. His presentation covered a lot of ground: understanding core labor market metrics, assessing current market conditions, and identifying future challenges and opportunities for employers.

First, Ladner noted that the U.S. economy “ended last year on a high note.” Both the November and December revised jobs reports posted strong numbers for nonfarm job creation. Ladner said 2024’s figures generally indicated a return to post-pandemic normalcy for the labor market. Moving into the first months of 2025, employment gains remained in the healthy range. However, he cautioned that job creation continues to be uneven across sectors, with a few standouts and others continuing to underperform.  

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For example, health care and social assistance employment remains strong, and this category accounts for about one-third of all U.S. job gains since February 2022, totaling 2.81 million new jobs in this period. Ladner explained that health care jobs have been in growth mode in recent decades, driven by the needs of an aging population, and this trend is expected to continue for the foreseeable future.  

Government hiring also contributed 1.57 million jobs over this three-year period. This figure counts federal, state, and local employment, Ladner noted, with most of the growth at the local and state level, consistent with the general distribution of government employment.

Retail trade posted “weak” numbers, adding just 10,000 total jobs, continuing the decline seen for most of the 21st century. Ladner pointed to online shopping habits as a major driver, in addition to increasing automation.

One industry posting job losses from February 2022 through February 2025 was the information sector. Here, Ladner said, there’s “a little bit more of a complicated story.” That narrative includes a boom around the middle of 2020, when companies were investing in solutions to facilitate remote work. But information job growth has showed “softness” since late 2022, when the sector began seeing employment declines. Still, in part because the information sector includes the tech industry, Ladner said it’s reasonable to think it will be OK in the long term.

Administration and support services were also down nearly half a million jobs during the 2022-2025 period. The decline isn’t surprising, Ladner said, as the sector’s growth has been lackluster for some time. Many positions in this category feature “very automatable work” and are vulnerable to the technological changes (such as AI adoption) that are driving growth in other areas, according to Ladner.

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As of early 2025, the U3 unemployment rate — determined by the number of people 16 and over actively searching for a job as a percentage of the total labor force — stands around 4.1%, which is relatively low by historical standards and indicative of a strong, competitive labor market.

However, the U6 unemployment rate (which adds discouraged workers and those working part-time for economic reasons to the job seeker count) has ticked up noticeably since the beginning of the year, Ladner pointed out. While still relatively low, the gradual rise suggests underlying economic changes, particularly related to underemployment and labor force attachment.

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Ladner also shared insights into wage inflation, measured by the year-over-year growth rate of average hourly earnings. Data from the Bureau of Labor Statistics’ (BLS’) Current Employment Statistics showed the rate was close to 5.9% in March 2022. This rate was “very, very” high by recent historical standards, driven in part by the fact that labor demand significantly outpaced labor supply for this period, in addition to inflation.  Since that time, Ladner noted, wage inflation has steadily declined to 4% but is still above the 2007-2025 average of 3.1%. This number “will be interesting to track” in the next few months, he said.

Turnover and Worker Behavior

Ladner next dug into the numbers from the BLS’ Job Openings and Labor Turnover Survey (JOLTS) to investigate job openings, hires, and turnover trends. The top line: the job openings rate remains high by historical standards, while hiring has slowed significantly.  

In late 2021, job openings peaked at the “historically unprecedented” rate of 7%. Though much lower in 2025, at 4.6% as of January, this rate is roughly comparable to the market prior to the pandemic shutdown era. 

However, the situation on the ground varies significantly by sector. For example, Ladner pointed out that health care is still “hiring as quickly as you can,” while that isn’t necessarily the case for other industries. Some of this weakness is due to a lack of available workers with relevant skills, rather than competition among employers.  

The overall turnover rate has also been on the downswing. This has been driven entirely by a decline in the quits rate, which peaked around 3% during the Great Resignation. Layoffs and discharges have remained flat and are low by historical standards (around 1%, as opposed to the 1.3-1.5% range seen recently).  

The waning quits rate means that people are less likely to voluntarily switch jobs, reflecting worker attitudes toward the state of the economy. It’s also important to note that this change does not mean underlying employee dissatisfaction has been addressed.

Shifting to the unemployed-to-job -openings ratio (UJOR), Ladner observed the figure has risen but remains “stubbornly below 1” on a national level. This is significant because, in principle, a UJOR above 1 means there are enough people to fill job openings. In January 2025, the UJOR was at 0.9, compared to 0.5, where it hovered for most of 2022. Overall, this points to a lot of challenges around hiring and retaining talent.

However, this ratio varies significantly by sector and by state, with state-specific values in December 2024 ranging from 0.4 to 1.7. The West Coast, Texas, and parts of the Midwest are above 1, indicating relatively more available workers per job opening. In contrast, Virginia and states in the Upper Midwest and Mountain West show tighter labor markets with potential worker shortages looming.