It seems that, unlike the rest of us, the labor market didn’t catch a bout of seasonal depression in January.
The labor market was continually strong in January, even as economic concerns like tariffs loomed overhead, according to latest job openings and labor turnover survey data from the Bureau of Labor Statistics.
“I do think they beat expectations a little bit which goes in line with what I’m seeing on the ground,” Amy Glaser, SVP of business operations at Adecco, told HR Brew. “I’m optimistic about the US labor market and their ability to navigate through what could be considered turbulent times.”
Diving into the data. Employers had 7.7 million job openings posted at the end of January, up from 7.5 million in December, and beating economists’ forecasts. Similarly, total quits jumped to 3.3 million, from 3.1 million in December. Hires were stagnant, though, remaining at a hiring rate of 3.4%, and layoffs decreased slightly to 1.6 million, down 100,000 from the month prior.
Trade, transportation, and utilities saw a spike in turnover; quits in the sector rose by 53,000 month over month (MoM) to 670,000, while job openings rose by 149,000 to 1.2 million total in January, boosted primarily by retail trade. Despite retail trade seeing a drop in February payroll data, this spike could indicate employers in the industry may be gearing up for busier months ahead.
“In real time data, we’re seeing more hiring activity,” Rajesh Namboothiry, SVP at Manpower North America, told HR Brew. “I think that is indicative of some optimism they see as they start to see some volume pick up in spring.”
Professional and business services might be seeing more outflow than demand; quits in that industry rose by 30,000 to 565,000 in January—also jumping 89,000 YoY—and layoffs increased by 62,000 MoM. Meanwhile, job openings were down 122,000 MoM—the largest decrease of any industry. Relatedly, the February employment data reported an overall payroll decline by 2,000 for that industry while the unemployment rate jumped up to 5.3%.
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It’s likely companies in that sector are currently trying to trim back on costs, and targeting hiring as part of that.
“All of these companies are looking at overall cost, and [asking]: How do we tighten up spend? I think this is an area they’re looking to lock down, and freeze hiring a little bit,” Namboothiry said.
Zoom out. Despite January’s strong JOLTS data, uncertainty still looms overhead. If President Trump’s tariffs go into effect, employers might have to pull back on hiring further. That, in turn, could trigger lower consumer spending, Namboothiry said.
Relatedly, ManpowerGroup’s latest employment outlook survey found that 12% of employers anticipate a decrease in staff in Q2 2025, and economic uncertainty was the top reason given why. Another 38% expect to maintain current staffing levels, and 46% plan to increase employment, though Namboothiry expects the latter will recruit niche roles.
“What we’re seeing in the markets now, that’s contributing to what is going to be a very cautious, wait and watch approach that employers are going to continue to take,” he said.
That said, employers have learned a lot about tackling challenges over the past five years, and will likely continue to lean on those lessons in the year ahead.
“There’s a lot of noise going on right now, but I think if Covid taught us anything, it taught employers how to pivot, how to be flexible, creative and also resilient. And I continue to see that into the future of 2025,” Glaser said.
