New data reveals a significant cooling in the United States labour market as 2025 drew to a close, with job vacancies plummeting to a five-year low in December. The latest figures indicate a notable softening in employment conditions, prompting analysis from economists and policymakers alike.
Sharp Decline in Job Openings
According to the Bureau of Labor Statistics' Job Openings and Labor Turnover Survey (JOLTS) released on Thursday, job openings—a key measure of labour demand—decreased by 386,000 to 6.542 million by the last day of December. This marks the lowest level recorded since September 2020, underscoring a substantial downturn in hiring appetite across various sectors.
Furthermore, data for November was revised downward, showing 6.928 million job openings instead of the previously reported 7.146 million. This revision fell well below economists' forecasts, who had anticipated around 7.20 million unfilled positions based on a Reuters poll. Despite the decline in openings, hiring saw a modest increase of 172,000 positions, reaching 5.293 million in December, though this figure remains relatively low by historical standards.
Volatility in Unemployment Claims
Concurrently, other labour market indicators presented a mixed picture. Initial claims for state unemployment benefits surged by 22,000 to a seasonally adjusted 231,000 for the week ending 31 January, representing the largest increase since early December. Economists had projected only 212,000 claims for that period, highlighting a larger-than-expected rise.
This spike in claims is attributed partly to severe weather disruptions, including heavy snow and freezing temperatures that blanketed large portions of the country towards the end of January. States such as Pennsylvania, New York, New Jersey, Illinois, Missouri, Ohio, and Wisconsin experienced notable increases in claims, likely due to temporary unemployment caused by the adverse conditions.
Economic Context and Expert Analysis
Carl Weinberg, chief economist at High Frequency Economics, provided context to the data, stating, "There is no sign of the kind of layoffs we expect to see in a weakening labour market during the early days of a recession. The level of claims is just very low. Claims are well within the recent range over the last two years." This suggests that, despite the volatility, the underlying trend points towards a stable labour market rather than a precipitous decline.
Economists note that the rise in claims also reflects a normalization after periods of volatility linked to seasonal adjustments around the holiday season and the turn of the year. Through these distortions, the labour market appears to be operating in what experts describe as a "low hire, low fire" mode, indicating restrained hiring and firing activities.
Delayed Comprehensive Job Report
Adding to the uncertainty, the most accurate snapshot of the jobs market—the monthly employment report scheduled for Friday—has been delayed due to the latest US government shutdown. This postponement leaves policymakers and analysts relying on interim data like the JOLTS report to gauge labour market health.
In summary, the decline in job openings to a five-year low, coupled with revised lower figures for November and volatile unemployment claims, paints a picture of a softening US labour market as 2025 concluded. While temporary factors like weather disruptions and seasonal adjustments contribute to the data's fluctuations, the overall trend suggests a cautious economic environment with stable yet subdued employment dynamics.
