Job openings jump to 3-month high, but businesses aren't actually hiring more people

By Jeffry Bartash

U.S. jobs market is stagnant, with little hope of quick improvement

A "Now hiring" sign is seen at a Chipotle restaurant.

Job openings in the U.S. showed a surprising pop in January, but it's far from clear if the increase is sustainable. Other evidence suggests the labor market is still very sluggish.

U.S. job openings increased by almost 400,000 in January to 6.9 million, the government said Friday. That was the highest level in three months.

Good news, to be sure, but there was not a commensurate increase in hiring. New hires in January were flat at 5.3 million.

January is often a turbulent month for the labor market. Temporary holiday workers are let go, and winter weather can have a big impact on hiring, making it hard to determine what is really going on.

The most recent U.S. jobs report - for February - showed a decline in employment and little hiring across the economy.

What's more, the raging conflict with Iran and the Supreme Court's decision to strike down the original Trump tariffs as unconstitutional will only add to the reluctance of businesses to hire in the short run.

The saving grace for the labor market is a surprisingly low level of layoffs. They fell to a 10-month low in January and are near the lowest level on record dating to 2001.

The unemployment rate is still exceedingly low at 4.4%, and the number of people who applied for jobless benefits last week was even lower than it was one year ago.

Economists call it a "low-hire, low-fire" labor market.

Key details: Almost half of the new job openings in January were posted by banks, insurers and other financial companies. Retailers, restaurants and hotels accounted for most of the rest.

Job openings fell for professional and business jobs - basically white-collar work. Some analysts wonder if artificial intelligence is hurting this segment of the labor market.

Big picture: The labor market began to deflate in 2024, but moves by the Trump White House to raise tariffs, increase deportations and eliminate government jobs added to the stress last year.

The hope was that hiring would pick up this year as tariffs faded and the economy strengthened. Now the prospects of a rebound in job creation are in doubt.

Market reaction: The Dow Jones Industrial Average DJIA and the S&P 500 SPX rose in Friday trading.

-Jeffry Bartash

This content was created by MarketWatch, which is operated by Dow Jones & Co. MarketWatch is published independently from Dow Jones Newswires and The Wall Street Journal.

(END) Dow Jones Newswires

03-13-26 1051ET