A week from Friday, we’ll get the government hiring and unemployment data for July. In June, the unemployment rate ticked down slightly to 4.2%, and the U.S. economy added just 57,000 jobs. But the headline numbers don’t tell the whole story of what’s happening in the labor market.
A new report from Minneapolis Fed regional analyst Haley Chinander examines what’s happening with remote work. She spoke with “Marketplace Morning Report” host Kimberly Adams earlier this month to break down the data. The following is an edited transcript of their conversation.
Kimberly Adams: We’ve all seen these headlines about employers calling workers back to the office, but what does the data actually reveal about what’s happening in real life?
Haley Chinander: There was a surge in the number of people working remotely following the start of the COVID-19 pandemic, and while there was a decline in those pandemic-era highs, the rate of remote work has really plateaued in the last couple of years, with the data suggesting that around 22% of the workforce is spending at least part of their work week from home.
Adams: Which industries, in particular, saw the biggest changes in the last couple of years?
Chinander: In the public administration sector, which is really a lot of those government jobs, there was a decline of about six percentage points in the remote work rate within that sector between 2024 and 2025. So this was the most substantial drop within a sector in remote work, and I think that aligns with a lot of the announcements we saw from, you know, we had the executive order for the federal workers, and then across different states, there were a lot of changes for state employees where they would either have to come back at least part of the time or fully in office.
Adams: There were also some regional trends you highlighted in your report in terms of remote work. What were some themes that jumped out to you?
Chinander: Minnesota had one of the higher rates of remote work. While the national average was around that 22%, [the] Minnesota rate was more around 24%, and this was a little unique for the region. Wisconsin was a little similar, but the Dakotas and Montana, which are part of the Federal Reserve’s Ninth District, had lower rates.
Adams: What do you think the staying power of remote work, especially now that the numbers have stabilized a bit, tells us about the broader labor market right now?
Chinander: I think one thing when it comes to a lot of these announcements is that, while they are large employers, they are still a minority of employers. So it’s possible that there are a lot of other employers that are still offering fully remote work as a benefit to attract labor to their businesses. It’s also the case that, for many of these hybrid workers or even fully remote workers, where the schedules are five days a week, employers are allowing — at least from what I’ve heard anecdotally — a lot of flexibility for their employees still. So, think of a parent that is working from home in the morning before dropping their kid off for school and then heading into the office, or someone going to a doctor’s appointment later in the day and then finishing up their day at home. So, even though people may be in the office five days a week, there is still probably a lot of people working part of their time from home.
Adams: It seems like that flexibility is really quite the incentive.
Chinander: I think that is what we really see for a lot of employees is that the choice and the ability to decide when and where they are working is what they value most. When we look at generational opinion data, we see that younger employees are saying that they want to be in the office more for the ability to have mentorship and training and even socialization, but people later in their career — think those 35- to 45-year-olds, who maybe have caretaking responsibilities with children or even older parents — they really, really value that flexibility, and there is higher amounts of remote work happening for those age brackets.
