January’s job openings report pointed to a strong labor market, confirming that the solid 151,000 net jobs added in February reflected underlying strength rather than short-term noise.
It was an all-around positive report, with rising vacancies, fewer layoffs and increasing hiring, according to data released Tuesday by the Bureau of Labor Statistics.
The quit rate, a proxy for labor demand, also rose in January, indicating that workers were in a stronger bargaining position as demand increased.
This should serve as another key data point, following the jobs report from last week, to help alleviate some concerns about the growth scare spreading across the market.
The current situation bears a striking resemblance to early 2022, when the economy experienced two consecutive quarters of slow growth, prompting a market selloff and predictions of an imminent recession.
This time, the labor market may once again prove to be one of the few economic indicators showing strength.
We anticipate that federal government layoffs will affect the overall labor market. But we believe the private sector should remain strong enough to absorb those job cuts.
That said, much will depend on how tariff policies unfold in the next couple of months, as they certainly have the potential to upend the status quo within the private sector.
Inside the data
There were 7.74 million job openings in January, up from 7.508 million in December. That brought the job openings rate to 4.6%.
Read more of RSM’s insights on the economy and the middle market.
Hires also rose to 5.393 million from 5.374 million, while layoffs fell to 1.635 million from 1.669 million. There were 1.1 available jobs per unemployed worker in January, unchanged from a month ago.
Most of the increase in vacancies came from wholesale and retail trade, health care services and financial activities.
