Job Openings Slide, Layoff Announcements Surge — Evening Brief – 02.05.26
A fresh batch of labor-market data is reinforcing the view that the U.S. employment backdrop is steadily softening, even as headline unemployment remains low. Falling job openings, weak hiring plans, and a sharp rise in layoff announcements suggest employers are becoming more cautious.
The number of job openings fell to 6.54 million in December, down from 6.93 million in November, according to data released by the Bureau of Labor Statistics. The reading missed expectations for 7.25 million openings and marked a decline of 966,000 over the course of 2025.
Openings fell sharply in professional and business services (-257,000), retail trade (-195,000), and finance and insurance (-120,000). The job openings rate slipped to 3.9% from 4.2% in November.
While layoffs and discharges remained relatively muted at 1.76 million, the layoff rate held at 1.1% overall, masking notable sector-level stress. Layoff rates jumped in transportation, warehousing, and utilities to 2.9% from 1.4%, and rose in construction to 2.1% from 1.7%. The quits rate—a key measure of worker confidence—held steady at 2.0%.
Hiring showed only modest improvement. Total hires edged up to 5.29 million in December, led by gains in real estate, rental and leasing, and state and local government. Federal government hiring declined.
More forward-looking indicators point to additional strain. U.S.-based employers announced 108,000 job cuts in January, the highest January total since 2009, according to Challenger, Gray & Christmas. The figure surged 118% from a year earlier and more than tripled from December.
“Generally, we see a high number of job cuts in the first quarter, but this is a high total for January,” said Andy Challenger, chief revenue officer at Challenger. “It means most of these plans were set at the end of 2025, signaling employers are less than optimistic about the outlook for 2026.”
Transportation led January’s cuts, driven largely by UPS as it winds down its partnership with Amazon. Technology followed, also led by Amazon, while healthcare reported its highest level of job cuts since April 2020.
On the claims side, initial jobless claims for the week ended January 31 rose by 22,000 to 231,000, pushing the four-week moving average up to 212,250. Continuing claims for the week ended January 24 climbed to 1.844 million, even as the insured unemployment rate held at 1.2%.