“As Good As It Gets For Consumers”: Jobs and JOLTS Show Growth on Groundhog Day

Published on Feb 3, 2024

Written by Tim Hatton

illustration for jobs and jolts. it includes data, graphs, and a groundhog

The Employment Situation for January shows impressive, resilient job growth, and the Job Openings and Labor Turnover Survey (JOLTS) from December showed openings have reached a three-month high. Taken together, these two latest releases from the Bureau of Labor Statistics show a robust and stable labor market—maintaining the positive trend seen over the past several months.

“This is as good as it gets from the perspective of consumers,” said Lightcast Senior Economist Elizabeth Crofoot. “Slowing prices, low layoffs, strong economic growth, and a labor market with plenty of jobs in January points to a New Year with newfound confidence.” 

The BLS reported that the US added 353,000 jobs in January, well above economist predictions under 200,000. Job growth for December and November was also revised significantly upward, for a new combined total showing 126,000 more jobs than previously reported. The jobs report, which came out on Groundhog Day, showed many data points that repeated previous releases: unemployment rate held steady at 3.7% for the third month in a row, and the labor force participation rate was unchanged at 62.5%.

bill murray in groundhog day

As the Federal Reserve keeps its eye on inflation—which has shown encouraging signs of decreasing—one of the metrics it’s watching is wage growth, which rose from 4.1% to 4.5% in January. One major factor affecting that growth was new minimum wage laws in 22 states, affecting 10 million workers, which went into effect January 1. 

“Continued wage growth is yet another reason to believe that the labor market still has strong momentum; accelerated growth in wages, from both minimum wage increases and otherwise, poses a risk to increasing inflation,” said Lightcast Senior Economist Rachel Sederberg. “The trends we see in today’s job report are likely to be taken by the Fed as a reason for caution—if Punxsutawney Phil is correct, we may see an early spring but likely not an early interest rate cut.”

Bill Murray and a groundhog in the movie Groundhog Day

The job growth was distributed widely across many industries, including 74,000 new jobs in professional and business services, 70,000 in health care and 45,000 in retail trade. This upward trend, especially in professional and business services, provides a counterpoint to a narrative of increasing layoffs in tech and other industries with big names. Job openings in the December JOLTS were also higher in information and professional services.

“People have been looking in the wrong places and spinning a narrative of mass layoffs,” said Lightcast Senior Economist Layla O’Kane. “But it’s easier to notice the layoffs at ‘name’ companies. Everyone knows Amazon, but nobody knows the small IT services company that is still hiring. And that means the overall tech sector remains strong, with opportunities for tech workers who have lost their jobs. The real softening is in transportation and warehousing, as the pandemic-era surge in purchasing goods rather than services has faded.” 

Overall, job openings were up unexpectedly high to 9 million in December (and revised upward to 8.9M in November). Those numbers are lower than they were in 2021 and 2022, (when openings regularly reached 10 and 11 million) but that shows how the economy has settled down. “Job openings are flat, but they’re flat at a very high level,” O’Kane said. “The economy is humming along and it still needs workers.”

The more intriguing statistic from JOLTS was a decline in quits, which are down to 3.4 million from 3.5M and have been steadily declining since August. Generally, quits and openings move in tandem as more openings suggest that workers would be more confident switching jobs in a labor market that still needs them, but this shift suggests that the market might be turning the corner on high churn, even as demand for workers stays high.

“The quitting storm is over–all of the quitters have already quit,” said Lightcast Senior Economist Ron Hetrick. “Workers are settling into jobs, which is good news in fighting inflation. Every time someone quits, an employer has to go find someone else, probably for more money…If service industries can meet their labor needs, there’s less need to raise wages, and less need to pass that on in higher prices.” 

After deciding not to raise or lower interest rates at its most recent meeting Wednesday, investors might be hoping the Fed will cut rates at its next meeting in March, but the overall trend of these two reports shows that the labor market is still strong and resilient, and that rate cut might not come that soon. But from an employer perspective, the ongoing need for workers means competition is tight to find the talent they need, and there’s no room for error in developing a future-ready workforce and intelligent, data-driven workforce planning. The world of work is still dynamic and complex, and the stakes are high, but encouraging reports from JOLTS and the jobs report indicate we’re closer to a balance where employers and jobseekers can both find their best fits in the labor market, both for today and for tomorrow—assuming, of course, that tomorrow isn't today all over again.

Bill Murray in Groundhog Day