A leading indicator has signaled a potential loss of jobs over the next few months amid weaker January employment data.
On the positive side, the unemployment rate dipped from 4.1 to 4 percent, beating investor expectations. Wage growth and labor force participation all ticked up.
“While jobs weren’t exceptional by any means, a lower unemployment rate and a strong increase in wage growth means the labor market is still healthy,” Bryce Doty, senior portfolio manager and senior vice president at Sit Investment Associates, told The Epoch Times.
Chris Zaccarelli, chief information officer for Northlight Asset Management, said that even though job growth could be slowing down, January tends to be a “noisy month” as the jump in holiday hiring eases.
“While we remain cautiously optimistic in early 2025, we see much more downside potential this year than we have in the prior two years and believe now is a time for caution and a dialing back of risk-taking.”
Mitchell Barnes, an economist with The Conference Board, said that even though the ETI declined last month, the fall came after “three consecutive monthly gains.”
“While the labor market has cooled from its 2022 pace, metrics through January are broadly in line with the pre-pandemic labor market,” he said. “Overall, January data reaffirms that the labor market remains stable.
“High employment levels, sustained real wage growth, and steady labor demand continue to support economic momentum.”
The ETI is an aggregate of eight leading employment components. In January, five of the eight were negative.
Job Cuts and Hiring
According to recent report from global outplacement company Challenger, Gray & Christmas, employers based in the United States announced 49,795 job cuts in January, a 28 percent increase from December 2024. On an annual basis, however, the figure is down by 40 percent. This was the lowest number of January cuts since 2022.“January was relatively quiet in terms of job cut announcements,” Andrew Challenger, senior vice president of the company, said. “However, we’ve already seen major announcements in the early days of February, so it seems this quiet is unlikely to last.”
Challenger said companies went through “extraordinary change” last year, citing changing economic conditions and rapid technological advancements.
“Most employers are anticipating additional uncertainty with the upcoming administration, which is leading to slower hiring and more layoffs in the short term from various sectors,” he said.
Negative View of Recent Grads
Recent college graduates could end up facing a tougher time getting hired this year because many hiring managers carry negative perceptions about them, according to a recent survey by educational research resource Intelligent.com.The survey, done at the end of December 2024, polled 1,000 U.S. managers who hire workers for entry-level positions.
One in eight said they intended to avoid hiring recent college grads this year. One-third said recent graduates lacked work ethic, and 24 percent said the grads were unprepared for the workforce.
Managers complained that many graduates struggled with eye contact and were not dressed appropriately during interviews. Last year, 55 percent fired a recent college grad whom they had hired.
“Recent college graduates should be aware of the negative perceptions and biases that exist against them,” Huy Nguyen, chief education and career development adviser at Intelligent.com, said.
“By understanding what frustrates managers the most and taking an intentional approach to interviewing, candidates can increase their chances of making a good impression and standing out among the sea of other applicants.”
