The latest jobs report details a decline in job growth and a slight drop in unemployment to start the new year.
Takeaways include:
- 143,000 jobs were added in January
- Unemployment decreased from 4.1% to 4%
- Workforce participation remained unchanged at 62.6%
- Wage growth increased by 0.5% month-over-month
Here’s what these trends mean for employers and hiring strategies.
Number of Jobs Available
Job growth slowed in January compared to the 256,000 jobs added in December 2024.
The biggest gains came in healthcare (+44,000), retail trade (+34,000), government (+32,000) and social assistance (+22,000).
However, the mining, quarrying, and oil and gas extraction industry experienced a decline, losing 8,000 jobs.
Other major industries, including construction, manufacturing, wholesale trade, transportation and warehousing, information, and financial activities, showed little change in employment for the month.
It’s also worth noting that disruptions from wildfires in California and cold weather conditions are estimated to reduce job numbers by approximately 40,000 combined, mostly affecting sectors like accommodation, food services, and construction.
Unemployment
The unemployment rate edged down to 4.0%, its lowest point since May 2024, and has stayed at or below 4.2% since November 2021.
In the latest JOLTS report, which shows hires and separations for December, the number of job openings dropped to 7.6 million, down from 8.2 million. Though even with this decline, there were still 1.1 job openings for every unemployed person.
Total separations held steady at 5.3 million in December. Within separations, quits decreased slightly to 3.2 million, while layoffs and discharges remained unchanged at 1.8 million.
Wage Growth and Workforce Participation
Wage growth picked up month-over-month, rising from 0.3% to 0.5%. Over the past 12 months, wages have increased by 4.1%.
Workforce participation held steady at 62.6% in January, staying within the 62% range since December 2021. The employment-population ratio also held steady at 60.1%.
Economic Variables to Keep an Eye On
Shifting trade policies may have ripple effects on hiring and workforce stability.
- New tariffs on Chinese goods—including laptops, toys, cars, and auto parts—took effect this month, which could disrupt supply chains and increase costs for businesses.
- Proposed tariffs on imports from Mexico and Canada have been delayed by 30 days but are still expected to take effect, adding uncertainty to pricing and production planning.
As business costs rise, companies may need to adjust hiring plans, wages, or workforce structures to offset increased expenses. Employers should stay informed on these changes and consider proactive strategies to maintain workforce stability while navigating potential cost pressures.
Winning Moves for Employers
To succeed in today’s labor market, employers need to be flexible, proactive, and competitive.
Here’s how to stay ahead:
- Keep retention in focus. Even in a steady labor market, retention remains key. Employees may not be actively job searching, but they’re still evaluating their options. Ensuring a positive work environment, recognizing contributions, and maintaining open communication can strengthen engagement and reduce turnover.
- Adapt hiring strategies to market trends. Job market shifts aren’t the same across industries. While industries like healthcare and retail trade are seeing growth, other sectors remain steady or slow-moving. If applicant flow has slowed in your industry, consider what you can offer beyond pay—such as predictable schedules, career pathways, or training opportunities.
- Stay flexible with temporary and long-term hiring. When hiring slows or demands shift, having the right workforce strategy matters. Temporary staffing can help keep operations running smoothly, while a strong hiring plan ensures long-term stability.
These strategies can help businesses remain resilient and competitive as the labor market continues to evolve.
Need staffing support? Verstela helps employers fill immediate gaps and build for the future—making hiring easier at every stage.
Interested in more resources? Visit our employer resource center for an archive of on-demand HR webinars, tools and articles to help you navigate workplace challenges.
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