Labor turnover stagnant in February as businesses brace for economic uncertainty

If there’s one word to describe the labor market right now, it’s “uncertainty.”

Businesses appear to be hunkering down on talent acquisition as they face a number of challenges in early 2025, including potential tariffs and renewed concerns over a recession. As such, labor turnover remained largely unchanged in February, according to the latest Job Openings and Labor Turnover Survey (JOLTS) data from the Bureau of Labor Statistics. Total hires and quits changed little or even decreased month over month (MoM), while job postings declined slightly.

“During high uncertainty times, it’s not surprising that companies scale back,” Sevin Yeltekin, a macroeconomist and dean of the Simon Business School at the University of Rochester, told HR Brew. “They’re going to take a little bit more of a conservative view in any kind of expansion, and in hiring as well.”

Let’s take a closer look.

Diving into the data. Employers had 7.6 million openings posted at the end of February, down from 7.8 million in January, and declining 877,000 year over year (YoY). Hires remained unchanged in February, at 5.4 million, while quits fell to 3.2 million in February, down 0.1 million from January and down 273,000 YoY. Involuntary attrition, or layoffs and discharges, increased slightly to 1.8 million in February.

The Trump administration’s cuts to the federal workforce began to trickle into the February JOLTS data. Layoffs in the federal government spiked by 18,000 between January and February, rising to 22,000 last month. Meanwhile, hiring fell by 5,000 MoM to 29,000 in January, and fell by 14,000 YoY.

“What we’re starting to see is what’s happening in the federal workforce, and that reality is starting to impact the report,” Kate Duchene, CEO of consulting firm RGP, told HR Brew. A lot of uncertainty remains around how many and which workers are exiting the workforce, as some layoffs have been walked back or subject to court injunctions, though future reports might give more insight.

Retail trade also saw a spike in layoffs, cutting an extra 67,000 jobs (the highest increase of any industry), while job postings fell by 126,000 and hires fell by 34,000. This cooling may, in part, be due to a combination of long-term trends, including a shift to ecommerce from brick and mortar sales, and short-term changes, including the departures of seasonal temporary workers and employers’ plans to cut costs as tariff threats loom and consumer spending sours.

The threat of tariffs will likely spur many industries to plan for cost-cutting initiatives, including labor. Late last year and early this year, many businesses were taking a wait-and-see approach regarding plans for business expansion and thus possibly increased hiring. But as uncertainty persists, those plans are again being pushed back, or disregarded.

“If revenue generation is going to be a problem across the board, and I’m talking about cross-industry, then you always turn to: What do these tariffs mean? How can we do more with less? How do we lower cost structure?” Duchene said. “That impacts everybody’s thinking right now.”

Zoom out. It’ll be key for HR and talent acquisition leaders to maintain an understanding of their business’s financial situation, and focus on maintaining morale and boosting productivity among their existing workforce.

“Nobody likes dealing with uncertainty, so probably more communication is required in this environment, and really clear communication is required,” Duchene said. “Because what you don’t want is to be facing different challenges and then have a very disrupted employee base that loses productivity.”

For HR leaders whose businesses are in a position to hire, now is the time to snatch top talent as competitors freeze or slow on hiring.

“Unless you have such a budgetary restriction that…you really cannot afford it, it is really an opportune time to go after bigger talent that in a tight labor market would have been harder for you to get,” Yeltekin said. “If there’s any room for flexibility, it's not a hard freeze, I would certainly advise people to be very strategic at this time. This is a good time to buy, as they say.”