The labor market is becoming increasingly inhospitable in the United States, as demand for workers continues to wane and job postings are at their lowest levels since the pandemic.
New data from the Bureau of Labor Statistics released Thursday showed that the estimated number of job openings sank to 6.54 million at the end of December, settling at the lowest level since September 2020. Hiring, quits and layoff rates held relatively steady.
The latest BLS report alongside other labor market data released this week provided further confirmation that the “low-hire, low-fire” slog continues.
There remain “slim pickings” for job seekers, said Elizabeth Renter, senior economist at NerdWallet.
“Job openings can be thought of as forward-looking; rather than an action that an employer has already taken, openings signal what they’re hoping (or not hoping) to do soon,” Renter wrote in commentary issued Thursday. “In this way, a decrease in openings for the month of December could indicate employer uncertainty about the new year.”
The uncertainty and fallout from sweeping policies implemented by the Trump administration – particularly in the areas of tariffs and immigration – have weighed heavily on hiring plans, noted Heather Long, chief economist at Navy Federal Credit Union. Companies instead have put their money toward testing the waters on technologies like artificial intelligence, she said.
“The hiring recession isn’t going to end anytime soon,” she wrote.
A sluggish January for the jobs market
Last year, the US labor market posted the
weakest job growth outside of a recession since 2003, Bureau of Labor Statistics data shows.
The official January jobs report isn’t coming out until next Wednesday (a delay triggered by the brief federal shutdown); however, based on labor market data released so far this week, there wasn’t a dramatic turnaround in the first month of 2026.
US private sector firms added
just 22,000 jobs in January, according to the latest estimates from payroll firm ADP. January’s estimated job gains – which were the weakest in three months and the worst for a January since a Covid-19 resurgence led to losses in 2021 – were driven largely by ongoing hiring in the health care industry.
Earlier Thursday, a new report from Challenger, Gray & Christmas showed that US-based employers announced plans to hire 5,306 workers. That’s the lowest total ever for the month of January, according to Challenger, which began tracking hiring announcements in 2009.
Separately on Thursday, the number of first-time claims for unemployment benefits jolted higher after a cool showing in January.
There were an estimated 231,000 initial jobless claims filed during the week that ended on January 31, an increase of 22,000 claims from the prior week, according to Labor Department data released Thursday.
The latest tally marks an eight-week high and comes after a recent stretch where filings, which are considered a proxy for layoff activity, had hovered around two-year lows.
However, economists have been cautioning that the tepid January for claims was not a sign of a turnaround in the labor market. Rather, it was likely because weaker holiday hiring resulted in fewer than typical layoffs in January, Samuel Tombs, chief US economist at Pantheon Macroeconomics, told CNN earlier this week.
Layoff announcements hit an unsavory milestone in January
Mass layoffs outlined last month by the likes of
Amazon and UPS made for the worst January for job cut announcements since the Great Recession, new data showed Thursday.
US-based employers announced 108,435 job cuts in January, a threefold increase from layoff announcements in December and more than double what was tallied in January a year earlier, according to Challenger, Gray & Christmas’ latest monthly report.
It’s the highest number of layoff announcements made in January since 2009, Challenger said.
About 40% of January’s layoff announcements can be tied to two firms: Amazon and UPS, which outlined plans for 16,000 and 30,000 job cuts, respectively. UPS’s plans to cut up to 30,000 jobs were tied to its ongoing wind-down of its delivery arrangement with Amazon, executives for the shipping giant said last week during an earnings call.
The January layoff announcements tracked by Challenger were limited to five industries – transportation, technology, health care and health products, chemical and financial, according to the report.
“Generally, 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 the outplacement and executive coaching firm, said in a statement. “It means most of these plans were set at the end of 2025, signaling employers are less than optimistic about the outlook for 2026.”
The biggest reasons cited for the month’s planned cutbacks were contract loss (30,784 – the bulk of which were attributed to UPS), followed by market and economic conditions (28,392), restructuring (20,044) or closures (12,738), according to the report. Artificial intelligence was cited for 7,624 cuts in January and tariffs were cited for 294 cuts last month (after being attributed for 7,908 announced cuts in 2025), Challenger noted.
“It’s difficult to say how big an impact AI is having on layoffs specifically,” he said. “We know leaders are talking about AI, many companies want to implement it in operations, and the market appears to be rewarding companies that mention it.”
It’s important to note that Challenger’s monthly report tallies layoff intentions, meaning that the actual job losses might not occur until weeks or months later and that the scope of those job cuts could be smaller than initially outlined.
Stocks extended losses after the data releases. The
Dow was down 637 points, or 1.29%. The S&P 500 fell 1.37%, and the tech-heavy Nasdaq Composite fell 1.74%.
