Labor market data released Tuesday was largely in line with Wall Street’s expectations, reflecting a gradually cooling labor market. Investors have been watching closely for any further signs of cracks forming in the US economy.
New data from the Bureau of Labor Statistics released Tuesday showed 7.74 million jobs open at the end of January, an increase from the 7.51 million seen in December. Still, job openings in January remained near a level last seen in early 2021 and don’t include the latest shifts in the labor market, such as the start of significant employee layoffs.
The December figure was revised lower from the 7.6 million open jobs initially reported, marking the largest sequential drop seen across the data in over a year. Economists surveyed by Bloomberg had expected Tuesday’s report to show 7.6 million openings in January.
The Job Openings and Labor Turnover Survey (JOLTS) also showed 5.39 million hires were made during the month, up slightly from the 5.37 million made during December. The hiring rate held flat at 3.4%. Also in Tuesday’s report, the quits rate, a sign of confidence among workers, rose to 2.1%, up from the 1.9% seen the two months prior.
Still, the hiring and quits rates are hovering near decade lows.
“The JOLTS data painted a familiar picture of the labor market, with a low pace of layoffs preventing a further rise in the unemployment rate despite a depressed rate of hiring,” Oxford Economics Lead US economist Nancy Vanden Houten wrote in a note to clients.
The JOLTS report is a lagging dataset. Tuesday’s release reflects where the labor market stood at the end of January before several of President Trump’s key policies — including tariffs and government job cuts — went into effect.
“We expect to see more of an impact of that freeze along with more recent layoffs of federal workers in the February JOLTS report,” Vanden Houten wrote.
In data released since, consumers appear to have soured more on the outlook for the labor market. In February, The Conference Board’s Consumer Confidence index saw its largest month-over-month drop in four years, partially driven by a souring mood in the labor market. Nearly 26% of respondents said they anticipate fewer jobs to be available in the next 12 months, up from 21% the month prior.
Other data released by ADP showed hiring in the private sector slowed in February as Trump’s policies came into focus. Data from ADP revealed the private sector added 77,000 jobs in February, significantly lower than the 186,000 jobs added in January. February’s data marked the largest month-over-month decline in private payroll additions since March 2023.
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