Labor Market Stalls as Job Openings Retreat
Labor Market Stalls as Job Openings Retreat
The labor market showed little movement in December, according to the latest JOLTS report, as an uptick in job openings the prior month proved short-lived. Openings fell back to their November level, reinforcing the broader cooling trend that has characterized the past year.
The headline numbers were largely unchanged elsewhere. Layoffs ticked up slightly mirroring the gradual upward trend in jobless claims. Meanwhile, key indicators of worker confidence and mobility—hires and quits—continued to show weakness, but no further deterioration. The hires rate has stabilized at 2013–2014 levels and the quits rate at 2015–2016 levels.
Zooming out, the labor market is noticeably softer than it was a year ago. Job openings are down almost 1.3 million since last December, monthly hires have fallen by more than 300K, monthly quits have fallen by more than 200K, and monthly layoffs have risen by more than 150K over the same period. These shifts reflect a job market that has slowed but not collapsed, with employers hesitant to expand payrolls but also reluctant to conduct mass layoffs.
The latest data offers little indication of a labor market rebound, but there is reason to expect hiring to pick up in 2025 as falling interest rates ease financial pressures on businesses, and an extended period of positive real wage growth boosts consumer confidence. In ZipRecruiter’s employer survey, businesses overwhelmingly said they expect to expand headcount more in the coming six months than they did in the prior six months. For now, however, the trend appears to be flattening rather than improving.
A closer look at the details reveals several emerging dynamics:
Production Sector Struggles Amid Stubbornly High Borrowing Costs – Weakness in the labor market is concentrated in capital-intensive industries, with job openings continuing to decline in mining and logging, construction, and manufacturing. Employers in these sectors had hoped that interest rates would normalize, but with the 10-year Treasury yield still above 4.5%, borrowing costs remain a major headwind. Investment and hiring are being put on hold as businesses wait for more favorable conditions.
Large Employers Pull Back, Despite Optimistic Outlook – Job openings have declined most sharply at companies with more than 1,000 employees. Surveys show that large employers are among the most optimistic about hiring in 2025, but so far, that confidence hasn’t translated into action. The JOLTS data suggests that, for now, even the biggest firms are taking a wait-and-see approach before ramping up hiring.
Sunbelt States Defy the National Trend – While job openings fell nationally, Sunbelt states were an exception, with all registering increases in November. Since the pandemic, Sunbelt and Mountain states have led the country in labor market expansion. But last month, the Mountain West followed the broader downtrend, leaving the Sunbelt as the lone bright spot in an otherwise flat hiring landscape.
Take a tour through the JOLTS report in ZipRecruiter charts.
