Workers Haven’t Felt This Gloomy About the Job Market Since COVID & the Data Backs Them Up
Six of the eight components that make up the index contributed negatively in February, a full reversal from January when seven of eight were positive. The index edged higher despite the underlying data pointing in the wrong direction, making the headline number the least useful part of this report.
The figure that deserves the most attention: the share of consumers who say jobs are hard to get rose to 20.6% in February, the highest reading since early 2021. That was peak COVID disruption. There’s no pandemic driving this sentiment now. There’s just a labor market that has been grinding sideways long enough that workers have genuinely lost confidence in it.
Other components that contributed negatively included initial unemployment insurance claims, which ticked back up after declining steadily since September, temporary help employment, which fell after gains in two of the three prior months, job openings, industrial production, and real manufacturing and trade sales. The only two components that contributed positively were the share of involuntary part-time workers, which fell to 16.2% from 19.4% in December, and the share of small firms reporting positions they can’t fill.
Conference Board economist Mitchell Barnes attributed Friday’s BLS payroll decline of 92,000 to temporary factors like weather and strikes, and described the labor market as roughly in balance because labor force growth has also slowed. That framing deserves scrutiny. A market where fewer people are even trying to find work isn’t balanced; it’s stagnant. Stability and stagnation aren’t the same thing, and right now, workers are telling us through their own sentiment which one they’re experiencing.
The Federal Workforce Experiment Is Partially Reversing, and the Math Is Telling
A year after DOGE-driven cuts began slashing the federal workforce, the Trump administration is quietly hiring people back. OPM Director Scott Kupor told the Washington Post: “We probably have some skills that we now need to hire back, quite frankly. There’s no question anytime you do restructurings, sometimes you over-restructure, sometimes you under-restructure.”
Here’s the math behind that admission. More than 387,000 federal employees were fired, laid off, or took buyouts since Trump took office. About 123,000 have been hired back, leaving a net reduction of roughly 264,000 workers. The gaps are showing up at agencies that handle services people depend on directly.
VA job applications are down 50% this fiscal year. The IRS hired only 50 of the 2,200 workers it needed for tax season, just 2% of its target. Social Security lost approximately 7,000 workers and has had to pull staff off regular duties to answer phones. The cybersecurity agency CISA lost nearly 40% of its staff, with one former official warning that the agency’s ability to detect threats from adversaries, including China, Russia, and Iran, is now severely diminished.
VA Secretary Douglas Collins put the compensation problem plainly when he told Congress: “When you have starting salaries of $600,000 for anesthesiologists in the community and I can’t pay that, I don’t blame them going somewhere else.” That’s not a talent shortage. It’s a pay gap. When an employer can’t match the market on compensation, the roles don’t get filled. That dynamic plays out identically in every industry, public or private. It’s also why how you structure compensation and attract candidates matters as much as whether you’re hiring at all.
The rehiring also comes with new conditions. Some postings now require applicants to explain how they’d advance the president’s policy priorities, a requirement that has limited appeal for mission-driven candidates who went into public service for reasons unrelated to politics.
The broader lesson for any organization watching this: workforce decisions made quickly and at scale are very hard to reverse cleanly. The operational and institutional costs of over-cutting rarely show up on the same balance sheet as the savings.
CEOs Are Reaching for the Layoff Lever at the Fastest Pace Since the Great Recession
January corporate job cuts were the largest for any year’s opening month since 2009, before Friday’s BLS report confirmed an additional 92,000 jobs lost in February. Business Insider examined why so many companies are cutting despite mixed or positive financial performance, and the short answer is uncertainty on every front: tariffs, AI disruption, geopolitical conflict, and an economic environment where nobody wants to commit to anything.
When all of those variables are live simultaneously, executives hold cash and reduce headcount, because payroll is almost always the biggest line item on the balance sheet. Wall Street has consistently rewarded this behavior. Companies, including Meta, Spotify, and Block, saw their stocks climb after announcing layoffs, and when executive compensation is tied to share price, that creates a feedback loop that accelerates cuts regardless of whether the business actually needs to shrink.
AI is the most debated factor. A Morgan Stanley survey of more than 900 executives found that, across the five industries most likely to feel near-term AI impacts, employment fell 4% on average over the past year while productivity rose. As the report put it, AI’s impact is “both measurable and accelerating faster than expected.” That’s not AI washing. That’s the actual trade being made.
The counterargument is real, too. Alibek Dostiyarov, cofounder of Perceptis, told Business Insider that “AI is just a convenient scapegoat,” and KPMG US CEO Tim Walsh said he doesn’t see AI driving most cutbacks, describing it as companies simply reassessing where they need people.
Both things can be true. Some companies are genuinely restructuring around AI and doing it honestly. Others are using it as a cover for cuts they wanted to make anyway, because citing innovation is a cleaner explanation than citing margin pressure. The workers absorbing these decisions don’t much care about the reason. What matters is that the job market they’re navigating is frozen, and as the Conference Board data at the top of this page shows, they’re feeling it. If your organization is still hiring through this environment, you’re in a stronger competitive position than you might realize.
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Frequently Asked Questions
Yes. More than 387,000 federal employees were fired, laid off, or took buyouts since President Trump took office. The administration has since hired back approximately 123,000, with OPM Director Scott Kupor publicly acknowledging the cuts may have gone too far in some areas. Net federal employment remains down roughly 264,000 from pre-cut levels.
Multiple data points point to the same problem: companies have largely stopped cutting but aren’t replacing the positions they lose through attrition. The Conference Board reported in February 2026 that 20.6% of consumers say jobs are hard to get, the highest reading since early 2021. Hiring rates are down, job postings are declining, and new posting salaries have started to tick downward.
Economic uncertainty, tariffs, AI disruption, and geopolitical instability have created an environment where many executives prefer to hold cash rather than invest in headcount. Wall Street has repeatedly rewarded layoff announcements with stock price gains, which creates a financial incentive for cuts regardless of actual company performance.
Both things appear to be happening simultaneously. A Morgan Stanley survey found measurable employment declines alongside rising productivity in AI-exposed industries, suggesting real structural change is underway. At the same time, some executives argue that AI is being cited as a justification for cuts that would have happened anyway. The workers affected bear the cost either way.
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Conference Board ETI: Why a rising index can still be bad news
Welcome back to Cornering the Job Market. Today’s headlines include a Washington Post investigation into the Trump administration’s reversal on federal hiring after they cut more than 387,000 workers. Also a business insider story that indicates CEOs are considering layoffs at the fastest pace since the Great Recession. But first, the Conference Board just released its employment trends index this morning. The headline number went up. It went from 105.8 in January to 105.37 in February, very small increase, which sounds fine, but it’s not because six of the eight components they measure contributed negatively, which is effectively a full reversal from January when seven of eight were positive. So what’s actually going on?
Let’s start with the number that should get the most attention. And this one is personal to me because it is the sentiment, right? This is what workers feel, this is what workers are saying really matters. And I trust that as much as any market data right now because the market data is so inconsistent. It’s revised so frequently. And I want to listen to the people because that’s who’s really experiencing how things are really going. And what the report tells us is that the share of consumers who say jobs are hard to get rose to 20.6%. And that is the highest level since early 2021. Remember what early 2021 was? Of course, everyone does. And that was when it was peak COVID time, it was a mess.
And so that is just a really bad sign. I mean, there’s nothing drastic going on right now, and unfortunately, there’s just a whole lot of nothing big happening, nothing big changing. That’s what the job market story has really been for the past year and a half now, probably. Is it it’s just this hurry up and wait mode. But the fact that workers are really feeling it at that level back to early 2021, that was really alarming for me to see this morning. Also in the report, initial unemployment claims were up after declining steadily since September. Temp hiring fell. I don’t talk about that a lot, even though it’s my industry. I know it’s not broadly interesting, but I do believe that the staffing industry is a leading indicator of what is going on in the market.
And also industrial production weakened. Manufacturing and trade sales went down, job openings contributed negatively. So this report, even though overall it went up slightly, I’m not exactly sure uh that that is what we should be paying attention to when everything else just looks bleak right now. The conference board’s economist, Mitchell Barnes, said that the 92,000 drop in BLS payrolls last month was driven by temporary factors like weather and strikes. Come on, Mitchell, I don’t think we’re buying that for a second. His read is that the labor market is roughly imbalanced because labor force growth has slowed too. And I’d I’d push back on that framing. In balance because fewer people are even trying, is it stability? That’s just putting a better spin on stagnation. So that is their perspective.
We did get another perspective on Friday that I didn’t get to talk about yet. And this is a press release that was kind of quietly put out by the Secretary of the Department of Labor, who blamed the February payroll drop that I talked about in detail on Friday on the same thing record-breaking strikes and bad winter weather. Wow, that they seem very in sync on this, don’t they? And she pointed to wages rising 3.8% year over year and said positive signs for our economy continue to show American workers are recovering from the mess left behind by Biden. It’s been over a year. Can we really still blame Biden? Her takeaway uh was that she’s optimistic that job growth will continue. Well, I’m glad someone is. We just talked about how the workers, the ones who are in the job market, aren’t.
So some bureaucrat is telling us they’re optimistic despite all the data that we’re seeing. Uh look, uh this isn’t about politics. I mean, I I blame every administration uh when they spout BS. But honestly, blaming Biden for this jobs report, um that’s just a stretch. I’m not seeing that. At some point, the economy that you’re running is the economy that you own, right? I think we have to acknowledge that. And wages outpacing inflation is legitimately good news for workers. I want to give credit where it’s due on that. But wage growth doesn’t help if you can’t find a job in the first place. So that’s what we’re dealing with right now. And the data uh we just talked about says finding a job is getting harder than it was before. I mean, that is reality right now.
Now, there were two bright spots out of eight things that this index measures. Involuntary part-time workers as a share of all part-timers fell to 16.2%, which is down from 19.4% in December. And so that’s a good thing. More people getting uh full-time hours is is positive, but just a couple of positive indicators out of eight doesn’t tell a healthy story. Barnes also said that mixed signals may persist as businesses and consumers work through policy uncertainty. Well, yeah, I mean, that has been the theme for a while. Nobody knows what’s coming next, so no one’s willing to commit to anything. So that is where we are.
Federal workforce cuts, rehiring, and the math that doesn’t add up
And the next story a year after the doge-driven push to slash the federal workforce, the Trump administration is now hiring people back. OPM director Scott Kapoor told the Washington Post that after restructurings, sometimes you over-restructure. Okay, great. What once again with the bureaucrats speak uh today, I love it. But here’s the math. More than 387,000 federal employees were fired, laid off, or took buyouts since Trump took office, and about 123,000 have been hired back. The fallout is showing up at agencies that handle things people actually depend on. VA job applications are down 50% this fiscal year. That is just a huge decline.
And the IRS, not that we’re any fans of the IRS, don’t get me wrong there, but the IRS hired only 50 of the 2200 it needed for tax season. So again, I who’s are we really complaining about that? Maybe, but that is, I think it’s indicative of a problem. Uh, maybe not a problem that most of us are going to gripe about, but but that’s only 2% of its target. So the IRS can’t hire. Uh Social Security lost about 7,000 workers and had to pull people off of their regular jobs to answer phones. So look, take that much more seriously. We need people making sure that they have access to their Social Security payments. Whether you like that program or not, a lot of people, millions of people rely on that. So that’s important. And they lost 7,000 workers that clearly they needed based on what this story is telling us.
Also, the agency that defends against cyber attacks, they lost nearly 40% of their staff. VA Secretary Douglas Collins told Congress that he wants to hire more healthcare workers, but can’t compete on salary. He said when you have starting salaries of 600,000 for anesthesiologists in the community, and I can’t pay that, I don’t blame them going somewhere else. Nope, nobody would. I mean, you have to look salary is always the equalizer in the labor market. It is supply and demand. If there’s finite supply, they are going to go elsewhere. You have to figure out how to compensate those folks accordingly. And that’s a dynamic we see in every industry. When you can’t match the market on comp, you’re not going to fill the rolls. That’s just the way it is. And that is not indicative of a talent shortage.
It’s just a pay gap. And the rehiring comes with new rules that give the White House more control. That’s what also this article told us. Uh, gives them control over who gets hired and fired. Some job postings now ask applicants to explain how they’d advance the president’s policy priorities. Wow, interesting. Do we really need the person at the VA answering how they’re going to advance the current administration’s policy priorities? I don’t know that we want them involved in that. But here’s where we are, for better or worse. Doge is gone. Elon Musk split with Trump over the tax bill. You probably remember that. The department just kind of quietly went away. And there was no large-scale waste or fraud that really was ever definitively identified. And here’s a crazy number or stat is that the government actually spent more in 2025 than the year before. So not a great look in the Washington Post.
CEOs, layoffs, and the AI question that nobody can fully answer
But here’s the final uh story for today. January corporate job cuts were the biggest for the start of any year since 2009, during the Great Recession. And that was before the big loss that was reported on Friday of 92,000 jobs. This is a story from Business Insider. They dug into why so many companies are reaching for the layoff lever. And the short answer is it uncertainty on every front. So though these stories are all intertwined, aren’t they? There’s a lot of what I called earlier hurry up and wait, things not moving, stagnation, whatever you want to call it, but between the economy, tariffs, elections, AI, global conflict, right? Not a war. That’s what we were told. We’re not at war.
We’ll call it an operation, I guess. But global conflict, no matter how you slice it. And when that happens, CEOs are they’re gonna hold on to cash. They’re not gonna move. And as we know, payroll is usually the biggest line item on a balance sheet. So it’s not good for the workforce. And that’s what I care about. That’s what I am focused on talking about. And it’s been clear so far that Wall Street isn’t discouraging this behavior. Companies like Meta and Spotify saw their stocks rewarded after announcing layoffs. And it just happened with Block as well. And so when you have executive pay tied to stock performance, I mean that just creates a feedback loop that accelerates cuts in a time like this.
Also, a Morgan Stanley survey of more than 900 executives found that companies in five industries likely to feel near-term AI impacts saw employment fall 4% on average over the past year while productivity rose. Okay, so big camp out there that says AI is not really going to have an impact on the job market. AI washing is the reason for all these cuts. But this is pretty clear-cut that these companies were using AI to a more significant degree. They’re doing it with less, they’re doing the same work or better, more productivity with fewer employees. At some point, we have to acknowledge that this is having an actual impact. Also, we’ve seen that Amazon, they eliminated more than 57,000 corporate roles since late 2022. They’re obviously doing really well. Although not everyone is buying the AI narrative.
KPMG US CEO Tim Walsh told Business Insider he doesn’t see AI behind most cutbacks. Companies are just reassessing where they need people. Yes, that’s a way to put it. They’re just reassessing. So, look, my take is that two things can be true at the same time. Some companies are genuinely restructuring around AI. That is happening. And others are likely using it as a cover for cuts that they want to make anyway. Because look, AI is a trendy thing to talk about. It’s a trend that’s not going away, in my opinion. But that’s better than giving other reasons, and you’re not going to get blamed for being innovative and going towards AI. So to some degree, that is probably what’s going on. I think it’s a lot of both right now, but regardless, it is bad for workers. That is who is suffering right now because we’re seeing a frozen economy, companies not spending money, restructuring, whether it’s AI or otherwise.
And as we led with today, workers are feeling it. They are not feeling positive. And when you see job cuts like the one we just reported on Friday, it’s just not a good, not a good trend. The sentiment is poor right now. So hopefully we start to see some turnarounds soon. But man, we need to we need to see some good news in order for that to happen. We need a catalyst. I’m not sure what it’s gonna be, but I’ll keep looking for it and I’ll keep reporting the facts in the uh as they as they exist, right? As they exist. I’m not making up the news. I’m just sharing it so everyone’s in the loop. That’s it for today.
Fun fact: 80% of jobs are never posted publicly
So here’s our fun fact before we close, and this is about networking. The stat is that 80% of jobs are never posted publicly. They’re filled via word of mouth. So candidates are fighting for that 20%. And if you’re a standout, you have a great opportunity. I am a strong believer that you should only apply to jobs you’re actually qualified for and then take extra steps. That’s a different topic for a different day. But just know that if there’s an organization you want to work for, four out of five times, those jobs are never going to be posted publicly. So leverage your personal network, focus on building your personal network if you don’t have a strong one already, and that will expose you to more opportunities. So that is it for today. I will say goodbye. Thank you for listening. Please like, subscribe, share with anyone who you think might be interested, and I will look forward to talking to you tomorrow.
