The Job Market Got Even More Stagnant In December

Key Takeaways

Employers announced the fewest hiring plans since 2015 last year, as the job market stayed entrenched in a low hiring, low firing, low quitting limbo.

U.S. employers announced 769,953 hiring plans in 2024, down 1.3% from 2023, to a nine-year low, consulting firm Challenger, Gray & Christmas said in its monthly job market report Thursday. Businesses also increased layoffs, with the  761,358 job cuts announced in 2024 up 5.5% over the year before and the most since 2020.

Employers Aren't Hiring and Firing; Workers Aren't Quitting

The data added to the picture of a job market that's stayed relatively stable , if stagnant, in recent months. Most employers are hiring few workers, but are also resisting mass layoffs. Uncertainty about the trajectory of the economy under incoming president Donald Trump may have more employers in a holding pattern, several economists said.

"Economic uncertainty seems to have left many employers in a wait-and-see position, and therefore some are keeping job postings up for the right candidate that may apply but they are being more selective than in the previous few years when they were starving for workers," Justin Begley, an economist at Moody's Analytics, wrote in a commentary.

The job market is no longer as hot as it was in the immediate aftermath of the pandemic when workers were in high demand. However, recent official data on jobs has shown hiring, firing and quitting are all running at reduced levels compared to pre-pandemic times.

Although the Challenger report showed elevated layoffs, Begley said the uptick didn't necessarily mean the job market is taking a nosedive, noting that the dismissals were concentrated in just four industries: technology, retail, health care/products and financial services.

Surveys from the Bureau of Labor Statistics (BLS) show layoffs were near record lows as recently as November.

The Challenger report serves as an indicator of what to expect from the BLS jobs report for December which is due Thursday. Economists consider the BLS report the "gold standard" of labor market data, and the data tend to move financial markets more than reports from private companies like Challenger and ADP.

Read the original article on Investopedia