Is the mini recession in the US job market ending?
After slumping in late 2025, it has been a rocky road for the US labor market, especially after the February payrolls print shocked with how bad it was. But according to the latest JOLTS job openings and turnover report published by the BLS moments ago, by the time the February NFP picture was taking place, the seeds of a recovery may have been planted already thanks to a surge in US job openings, which rose by 396K in January, the biggest increase since Nov 2024, to 6.946 million from 6.550 million and the highest since last October.
Looking at the details, we find the the biggest increases were in finance and insurance (+184K), which is odd for a sector about to be swept by the private credit crisis. Other sector that saw a big jump in job openings were Trade, Transportation and Utilities, driven by a 130K increase in retail trade jobs; Private education and health services job opening also jumped by 123K, while Leisure and Hospitality increased by 185K. Professional and business services was the only major sector to see a sharp drop in job openings.
The jump in job openings means that after hitting a 5 year high, the labor demand deficit was cut in half, and in January there were 422K fewer job openings than unemployed workers, a big drop from the 953K the month prior.
Despite the jump in openings, the shift wasn’t big enough to change the openings to unemployed ratio, which remained at 0.9x, the lowest it has been since 2021.
And another indication that the labor market slump may be ending, after slamming hard at the end of 2025, both the number of hires and quits has rebounded, although it is still too early to determine if this is a regime change or just a dead cat bounce.
Overall, today’s JOLTs report was unexpectedly strong and should put to rest some of the fears sparked by last Friday’s catastrophic jobs report.
