The gig economy has been a growing trend even before the pandemic hit. According to PYMNTS, 32% of workers participated in the gig economy in some capacity, whether it was to supplement their incomes or as their primary source of revenue. This trend has continued into 2025, as evidenced by new data from the Bureau of Labor Statistics. The latest report shows that total nonfarm payroll employment increased by 151,000 in February, slightly below expectations and the 12-month average gain.
Despite modest overall growth in employment, there are signs of increasing pressures on the economy. The report barely captured any impact from tariffs and a pullback in job creation due to economic uncertainty. The unemployment rate also ticked up slightly to 4.1%.
One notable aspect of the recent data is the surge in part-time employment for economic reasons. The number of individuals employed part-time increased by 460,000 to 4.9 million, while the number of people not in the labor force who want a job rose by 414,000 to 5.9 million. This indicates that more people are turning to temporary, part-time, and project-based work to make ends meet.
Wage growth, however, remains muted, with average hourly earnings increasing by 10 cents to $35.93. The year-over-year increase is 4%, but it is not keeping up with consumer spending. Despite a decline in consumer expenditures in January, the annualized pace is still at 4.6%.
In terms of job gains by sector, the healthcare industry saw the most robust growth, adding 52,000 jobs. Retail trade, on the other hand, experienced a slight decline of 6,000 jobs, with food and beverage retailers seeing a decrease of 15,000 jobs. Federal government employment also declined by 10,000 jobs.
The shift towards part-time work may become more pronounced as government workers enter the workforce in significant numbers following department cuts. This has led to a decrease in the labor force participation rate to 62.4%, a level not seen in over two years.
Despite challenges in the job market, there are opportunities emerging in the gig economy. Platforms and providers enabling ad hoc instant payments have seen increased demand, as irregular payments outside of typical invoicing and payroll processes become more common. Gig economy workers, in particular, are at the forefront of this trend, with 39% of their ad hoc payments being sent instantly.
As the economy continues to evolve and adapt to changing workforce dynamics, it is essential for both workers and businesses to stay informed and agile in navigating these shifts. The gig economy presents both challenges and opportunities, and understanding these trends is crucial for success in the modern labor market.
