White-collar payrolls have now contracted for 31 straight months. Here's what the data shows

The unemployment rate was at 4.3% in March. Payrolls grew by 178,000 that month. By those top-line measures, the labor market looks fine. But it's not fine — at least not for the workers who populate office buildings rather than construction sites or hospital floors. White-collar payrolls have now contracted for 31 consecutive months, a statistic first reported by Aaron Terrazas, a former chief economist at Glassdoor. As Terrazas told Quartz for an article published last month, "We have not seen this long of a contraction in white-collar jobs outside of a recession ever before."

Here's what the data shows.

Where the white-collar job losses are concentrated

The Bureau of Labor Statistics organizes employment by industry "supersector," and the ones most associated with white-collar work are professional and business services, financial activities, and information (which includes technology firms). All three are in retreat.

Financial activities employment fell by 15,000 in March 2026 alone, driven by a loss of 16,000 in finance and insurance. The sector is now down 77,000 jobs since May 2025. The information sector continued to trend down in February 2026, losing an average of 5,000 jobs per month over the prior 12 months.

Professional and business services, the largest of the three supersectors, showed "little change" in both February and March, according to the BLS Employment Situation Summary, meaning it has stalled after years of growth.

The BLS's own benchmark revision process has confirmed that the weakness in these sectors was worse than initially reported. In the preliminary benchmark revision released in September 2025, professional and business services employment was revised down by 158,000 jobs, the information sector by 67,000, and financial activities by 39,000. The information sector's 2.3% downward revision was the largest on a percentage basis of any industry.

These are not small sectors. Professional and business services alone employs more than 22 million Americans.

The demand signals are even weaker

Employment counts measure who is on a payroll. Job openings and postings data measure where the economy is headed. By those forward-looking indicators, the picture for white-collar work is more concerning.

Job openings in professional and business services fell below one million for the first time since April 2020, according to KPMG's analysis of January 2026 JOLTS data. In the December 2025 JOLTS report, declines in job openings were especially severe in financial activities, down 25.1% (86,000 openings), and professional and business services, down 21.8% (284,000 openings), according to analysis from Indeed Hiring Lab.

Private job postings data tells a similar story. Data from workforce intelligence firm Revelio Labs shows that demand for both white-collar and blue-collar roles weakened between Q1 2024 and Q1 2025, but white-collar postings fell faster, declining 12.7% year-over-year compared to 11.9% for blue-collar roles. Over the two-year period from Q1 2023 to Q1 2025, overall postings for white-collar roles fell by 35.8%.

The decline for software developers was more than double that average. Business analysts, market researchers, and delivery managers also saw demand fall at roughly double the overall rate. Revelio Labs also found that the share of AI-exposed tasks listed in job postings fell from 29% in early 2022 to 25.5% by early 2025, suggesting companies are stripping automatable duties from the roles they continue to post.

The headline unemployment rate masks a trend

A 4.3% unemployment rate and a 31-month white-collar contraction are not contradictory. They measure different things. The unemployment rate captures people who are jobless and looking for work. It does not capture underemployment, workforce exits, or workers who have accepted roles below their qualifications.

The broader U-6 rate, which includes discouraged workers and those employed part-time for economic reasons, rose to 8% in March, according to the Bureau of Labor Statistics data hosted by the Federal Reserve Bank of St. Louis. The gap between U-3 (the headline rate) and U-6 has widened at the same time that white-collar payrolls have contracted.

That is consistent with what Terrazas described to Quartz: Labor market slack is showing up as "underemployment and workforce exits rather than formal unemployment." The structure of job growth reinforces the point. In 2025, health care and social assistance added 713,000 jobs, while professional and business services lost 97,000 and manufacturing lost 68,000, according to Indeed Hiring Lab's analysis of the December 2025 jobs report.

A displaced financial analyst is unlikely to become a home health aide. Growth in one sector does not offset contraction in another when the workers affected cannot move between them.

The unemployment rate itself is getting less reliable

A complicating factor: The data infrastructure tracking employment is under strain. The response rate for the BLS establishment survey (the Current Employment Statistics program) has fallen from about 60% in the decade before the pandemic to less than 45%, according to a March 2025 report from the Federal Reserve Bank of San Francisco.

The American Action Forum calculated the average response rate at just 43% in the 12 months through March 2025. Lower response rates do not automatically mean worse data. But they do mean that the initial picture of any given month is less certain, and that the benchmark revision process carries more weight. When the final benchmark for 2025 was published with the January 2026 jobs report, the full-year employment change was revised from an initially reported gain of 584,000 to just 181,000, a reduction of 403,000 positions, according to analysis from Real Investment Advice.

That means the labor market in 2025 was weaker than anyone knew while 2025 was happening. For white-collar workers experiencing a contraction that the headline numbers did not reflect, this is not a revelation. It is a confirmation.