The Trump administration on Thursday finalized its overhaul of the U.S. government's civil service system, according to a government statement, giving the president the power to hire and fire an estimated 50,000 career federal employees.
U.S. job openings fell to the lowest level in more than five years, another sign that the American labor market remains sluggish.
The Labor Department reported Thursday that vacancies fell to 6.5 million in December, from 6.9 million in November and the fewest since September 2020. Layoffs rose slightly. The number of people quitting their jobs — which shows confidence in their prospects — was basically unchanged at 3.2 million.
December openings came in lower than economists had forecast.
The economy is in a puzzling place. Growth is strong: Gross domestic product — the nation’s output of goods and services — advanced from July through September at the fastest pace in two years. But the job market is lackluster: Employers have added just 28,000 jobs a month since March. In the 2021-2023 hiring boom that followed COVID-19 lockdowns, by contrast, they were creating 400,000 jobs a month.
When the Labor Department releases hiring and unemployment numbers for January next Wednesday, they are expected to show the companies, government agencies, and nonprofits added about 70,000 jobs last month — modest but up from 50,000 in December.
On Wednesday, payroll processor ADP reported that private employers added just 22,000 jobs last month, far fewer than forecasters had expected. And the outplacement firm Challenger, Gray & Christmas said Thursday that companies slashed more than 108,000 jobs last month, the most since October and the worst January for job cuts since 2009.
“The hiring recession isn’t going to end anytime soon,’' Heather Long, chief economist at Navy Federal Credit Union, wrote in a commentary. “Job openings in December just fell to their lowest level since September 2020. It’s yet another sign of how little hiring – or interest in hiring – is happening in this economy.”
Economists are trying to figure out if hiring will accelerate to catch up to strong growth, or if growth will slow to reflect a weak labor market, or if advances in artificial intelligence and automation mean that the economy can roar ahead without creating many jobs.
The number of Americans applying for unemployment benefits jumped last wee,k but remains in the same historically low range of the past few years.
Applications for jobless aid for the week ending Jan. 31 rose by 22,000 to 231,000 from the previous week, the Labor Department reported Thursday. That’s significantly more than the 211,000 new applications that analysts surveyed by the data firm FactSet had forecast.
Applications for unemployment benefits are seen as representative of U.S. layoffs and are close to a real-time indicator of the health of the job market.
Several high-profile companies have announced job cuts in the past year, including UPS, Amazon, and Dow just last week.
On Wednesday, the Washington Post laid off one-third of its staff, eliminating its sports section, several foreign bureaus, and its books coverage in a widespread purge at the storied newspaper owned by billionaire Amazon founder Jeff Bezos. A private company, the Post did not disclose how many people it has on staff, making it impossible to estimate how many people were laid off.
Mounting layoff announcements in the past year, combined with the government’s own sluggish labor market reports, have left Americans increasingly pessimistic about the economy.
Last month, the government reported that hiring remained subdued in December, capping a year of weak employment gains that have frustrated job seekers even though layoffs and unemployment remained historically low.
Employers added just 50,000 jobs last month, nearly unchanged from a downwardly revised figure of 56,000 in November, according to the Labor Department. The unemployment rate slipped to 4.4%, its first decline since June.
January’s jobs report, which was scheduled for release on Friday, has been delayed due to the partial government shutdown earlier this week.
The U.S. economy gained just 584,000 jobs in 2025, an average of around 50,000 per month. That’s sharply lower than the more than 2 million added in 2024, which amounts to an average of nearly 170,000 per month.
The 2025 numbers represent the smallest annual job gains since the COVID-19 pandemic decimated the job market in 2020. Outside of recessions, it’s the slimmest annual increase since 2003.
The Labor Department on Thursday also reported that U.S. job openings fell in December to the lowest level in more than five years, another sign that the American labor market remains sluggish.
Vacancies fell to 6.5 million in December from 6.9 million in November and the fewest since September 2020. Layoffs rose slightly.
The data have revealed a labor market in which hiring has clearly slowed, hobbled by uncertainty raised by President Donald Trump’s tariffs and the lingering effects of the high interest rates the Fed engineered in 2022 and 2023 to tamp down a spike of pandemic-induced inflation.
The Federal Reserve, in an attempt to shore up a softening labor market, trimmed its benchmark lending rate by a quarter-point three straight times at the end of last year. However, last week the U.S. central bank left its benchmark lending rate unchanged in the midst of a broadly improving economic outlook and what officials called a stabilizing labor market.
Thursday’s report from the Labor Department also showed that the four-week moving average of jobless claims, which balances out some of the week-to-week gyrations, rose by 6,000 to 212,250.
The total number of Americans filing for jobless benefits for the previous week ending Jan. 24 grew by 25,000 to 1.84 million, the government said.
Employers announced 108,435 job cuts in January, the highest tally for the first month of the year since 2009, according to a report out Feb. 5, and a sign employers may be taking defensive steps against economic uncertainty.
The report, from global outplacement and executive coaching firm Challenger, Gray & Christmas, mirrored other data released Feb. 5 that suggested the labor market is cooling. Unemployment benefits claims rose in the most recent week, and job openings slipped in December.
“Generally, we see a high number of job cuts in the first quarter, but this is a high total for January,” Andy Challenger said in a release accompanying his firm's report.
Employer plans to hire were also at the lowest since 2009, the tail end of the Great Recession, when the jobless rate hovered near double digits, Challenger said. The 5,306 hiring plans announced in January were half the 10,496 announced in December, and job cuts were more than double.
Job-market data signals slowdown ... but how quickly?
Because of the brief government shutdown in early January, the Labor Department's payroll report will not be released this Friday as scheduled. As a result, analysts and investors were keeping close tabs on other indicators of how the economy and hiring are faring.
The number of Americans claiming unemployment benefits for the first time also spiked in the most recent week, the Labor Department said Feb. 5. Many economists and other analysts consider "initial claims" the best real-time read on the job market because it is released so frequently, but that can also make it jumpy.
Meanwhile, job openings continued to trend down, touching 6.5 million in December, according to the Labor Department's Job Openings and Labor Turnover report. The so-called JOLTS report is considered comprehensive, but the amount of time it takes to produce it makes it less timely.
Taken together, the morning's data made for a distinct lack of consensus among economy-watchers.
"Initial claims have returned to their trend, after a few weeks of unusually low numbers due to low seasonal hiring in Q4, and hence unusually low layoffs in January," said economists at Pantheon Macro in a note published just after the report was released.
But, they added, "we continue to think that the unemployment rate will continue to rise gradually over the first half of this year."
Christopher Rupkey, chief economist at FWDBONDS LLC, a market research firm, took a gloomier view. "There were 7.4 million job openings in October, and now openings are down to just 6.5 million in December," he wrote. "This is exactly what happens in a recession where the demand for labor evaporates overnight, and it will be a miracle if the economy isn’t nearing very close to the shores of recession."