Unemployment Dips to 4.0%
Jobs Growth
Hiring activity in the new year produced 143,000 new jobs. While approaching 2024’s monthly average of 166,000, January activity was far less robust than the two previous months, following upward revisions totaling a combined 100,000 more jobs than originally reported. Those changes resulted in 261,000 new jobs in November
and 307,000 new jobs in December.
Top Industries
The strongest growth for January was reported in healthcare, retail trade, government and social assistance. Declines were recorded in the mining, quarrying, and oil and gas extraction industry. Little movement was seen in other sectors.
Unemployment
The unemployment rate again showed little month-to-month movement, shifting from 4.1% in December to 4.0% in January.
Wages
Average hourly earnings saw a bump to 0.5% in January, with the 12-month average shifting up as well, to reach 4.1%.
Work Week
The average work week dropped to 34.1 hours in January.
Temporary Job Trends
Fewer people worked in the temporary jobs sector in January, which reported a loss of 12,400 jobs when compared with December.
What Does It All Mean?
As is often the case at the turn of a new year, the start of 2025 did not sustain the gangbusters showing at the end of 2024. Hiring slowed in January but remained strong. All indicators signal a stable economy, poised for a welcome surge in the coming months or a new, slower benchmark for post-pandemic growth.
The optimism of the past year is somewhat tempered, given the latest adjustment in labor market metrics from the Bureau of Labor Statistics: from April 2023 to March 2024, the economy produced nearly 600,000 fewer jobs than initially reported.
The nation continues to hold its collective breath, waiting to see how proposed changes in economic policies will impact the business environment. Most small business operators are optimistic about growth prospects. Others worry about renewed inflation due to rising prices. The bottom line is an uncertain one.
For most industries, hiring activity is fairly static, moving ahead in small, sustainable steps rather than unpredictable leaps and bounds. There is much to be said for consistency at any level. It allows for more realistic planning and more efficient execution of those plans.
Whatever the future brings, smart employers will continue to review and refresh their talent resources, looking for that perfect balance that aligns workforce planning and hiring activities to strategic priorities.
Sources: U.S. Bureau of Labor Statistics, Staffing Industry Analysts, CNN, CNBC, Bloomberg, Reuters, The Wall Street Journal, USA Today, FOX
