Puerto Rico labor market sends mixed signals
The most recent employment and unemployment data for Puerto Rico, released recently for August 2025, paint a mixed picture.
In August, private nonfarm payroll employment (seasonally adjusted) increased by 13,000 compared to the same month in 2024, and by 2,900 jobs compared to July, closing the year-to-date employment balance at a total of 766,500 jobs.
In turn, cumulative employment through August increased by 10,463, reflecting growth of 1.4%. This is lower than the average growth of 7.9% in 2022 and the 2.9% reported in 2023. In other words, the expansion of private wage employment has been slowing over the last year. However, the recovery trend in private employment still exceeds pre-2021 historical figures.
Data by sector show that, in August compared to July, private sector employment increased in professional and commercial services (2,200), commerce (500), construction (300), hotels and restaurants (200), and manufacturing (100).
In contrast, the sectors that registered the largest decreases were educational services (-400), finance and insurance (-100), and transportation, warehousing and utilities (-200). Private sector payroll employment is concentrated in three sectors: professional and commercial services, retail trade, and recreation and lodging.
Together, these sectors represent 49% of total private payroll employment and were responsible for the positive balance in private payroll employment.
On the other hand, data from the housing survey, which includes not only wage employment but also agricultural and self-employed workers, revealed worrying signs for August. The unemployment rate (not seasonally adjusted) has remained stable since 2024, averaging 5.6%, but recently rose to 6.4%, the highest level since 2022.
The number of unemployed people has been rising steadily, from 66,000 in January to 79,000 in August, an increase of 13,000, or 20%, the highest level since 2022. The increase was greater than the increase in the number of employed people.
Seventeen percent of employed people are self-employed, and 24.2% work less than 34 hours per week, a higher proportion than in 2024 (19.8%), reflecting a deterioration in the labor market.
Another important indicator is unemployment claims. The number of continuing claims, or workers who have already filed an initial claim and are still seeking unemployment benefits, although it decreased by early September, was above the claims accumulated during April and May. The same was true for initial unemployment claims.
What are the expectations? The performance of key labor market indicators currently suggests a moderating trend in employment growth, with worrying signs regarding the unemployment rate and the increase in part-time jobs.
Leslie Adames is an economist and director of the Economic Analysis and Policy Division at Estudios Técnicos. He previously worked in banking and government, and has taught economics at the University of Puerto Rico and the Polytechnic University.
