Dive Brief:

• Job openings last year plunged by 966,000 to 6.5 million, the lowest level since Sept. 2020, the Bureau of Labor Statistics said Thursday.
• “The hiring recession is not going to end anytime soon,” Navy Federal Credit Union Chief Economist Heather Long said in a statement. “Companies are not interested in hiring right now outside of health care and all-star AI talent,” she said, adding that businesses “overhired” in 2022 and 2023.
• In another indication Thursday of fragility in the labor market, the number of people who filed unemployment claims in the week through Jan. 31 increased more than forecast to 231,000, the Labor Department said.

Dive Insight:

The two government reports bolstered private sector data this week that have also flagged job market weakness. Private employers added only 22,000 jobs last month and 398,000 jobs last year, down from 771,000 in 2024, ADP said Wednesday.

At the same time, employers announced 108,435 job cuts in January, a 118% increase compared with the number of payroll reductions in Jan. 2025, according to Challenger, Gray & Christmas, an outplacement company.

“We see a high number of job cuts in the first quarter, but this is a high total for January,” Andy Challenger, chief revenue officer at Challenger, Gray & Christmas, said Thursday in a statement. The trimming of headcount indicates “employers are less-than-optimistic about the outlook for 2026,” Challenger said.

Transportation, technology and health product companies cut payrolls the most in January, Challenger said. UPS said it will trim staff by 30,000, while Amazon announced cuts totaling 16,000.

“Risks to the labor market persist,” Federal Reserve Governor Lisa Cook said Wednesday, noting slower job creation, with nonfarm payrolls rising by only 50,000 in both November and December after falling in October.

“Low payroll growth does not necessarily indicate a weakening labor market, as it is likely connected to the fall in the supply of workers due to immigration policies and underlying demographics,” she said.

At the same time, “labor demand has eased roughly in line with the fall in labor supply,” Cook said, adding that the job market appears to have “stabilized” at a 4.4% unemployment rate in December. The rate is far lower than the 6.2% average during the 50 years before the pandemic, she said.

The rise in the jobless rate from 3.4% in April 2023 means “we've gone from super-super strong to super strong,” Atlanta Fed President Raphael Bostic said Thursday during a question and answer session. “But there's always a concern that the trend — once you start moving you might get momentum — and go from super strong to weak.

Immigration policy and the highest tariffs since the 1930s pose the biggest obstacles to hiring, Long said.

“Tariffs have hit small businesses hard and caused them to halt hiring or even do layoffs, and the dramatic decline in immigration has curtailed the labor force and left some industries struggling to find enough workers,” she said.

“Despite strong growth and consumer spending, many businesses will remain hesitant to hire in this uncertain environment,” Long said.