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March 20, 2025

Total job openings in the United States ticked up to 7.7 million at the end of January, up from 7.5 million the month before. Openings are down compared to a year ago, but they have remained steady since June 2024 on a three-month moving average basis.

Job openings remained steady in nearly all states. The gains in Florida (+39,000) and California (+27,000) reversed declines last month. Arizona (+53,000) posted the largest gain. Openings declined in New York (-25,000) but they were still trending up compared to last fall.

Real-time data from show that job postings have started to trend down in many large states. After the wildfires in Los Angeles, labor demand in California has continued to drop. Postings are on a downward trend in both New York and Massachusetts as well. They have flatlined in Georgia and are also trending down in Florida and North Carolina; these states had posted upticks due to the recovery from the hurricanes' damages.

Job postings declined the most in Washington, DC, Virginia and Maryland. That reflects the budget cuts and layoffs in federal government agencies. It is estimated that there are two contract employees for every one government employee. The government cuts have second order employment effects on professional services firms, nonprofits, universities and state and local governments. The Job Openings and Labor Turnover Survey (JOLTS) data will likely show these declines in the months ahead.

The ratio of job openings to unemployed job seekers, a measure of balance in the labor market tracked closely by Federal Reserve officials, came in at 1.1 for the fourth straight month. The ratio increased in 29 states month-over-month.

Hiring slowed down in many states. The hiring rate declined month-over-month in Nevada (-1.9 percentage points), Oregon (-1.3 ppts) and Colorado (-0.8 ppt). At the same time, it rose in Texas to 4.2% from 3.3% last month. The negative effects on employment of the low hiring environment were offset by subdued levels of layoffs. Layoffs were flat in nearly all states.

Quits also changed little; most Americans are staying in their jobs longer. Data from the Federal Reserve Bank of Atlanta show that there was no longer a wage premium for switching jobs in February. That reverses a trend of wage gains when leaving a job that has been a feature of the US economy for most of the past decade. That helps explain why fewer workers are voluntarily leaving their jobs.

The low quits rate and lack of wage premium also suggest that wage growth will continue to decline this year. That is good news for the Fed; it should provide downward pressure on inflation within the context of policy-induced uncertainty that raises inflation's floor.

At the national level, the unemployment rate edged down to 4.01% in January from 4.09% in December. Month-over-month at the state level, only Pennsylvania posted a statistically significant change in the unemployment rate: to 3.8% in January from 3.7% in December.