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U.S. Job Openings Rise in January, but Tariff Policies Add More Uncertainty

The US job openings surged in January, according to the U.S. Bureau of Labor Statistics on March 11. Meanwhile, hiring and layoffs remained at historically low levels, indicating that the U.S. labor market remains resilient while gradually cooling. In January, job openings rose to 7.74 million (prior: 7.508 million), surpassing market expectations of 7.6 million and remaining above the pre-pandemic average of 7.2 million. The increase in job openings was primarily driven by gains in retail trade (+143,000), financial services (+122,000), and education and healthcare (+41,000). The job openings rate edged up to 4.6% (prior: 4.5%), while the ratio of job openings to unemployed persons slightly increased to 1.13 (prior: 1.09), though still below the pre-pandemic average of 1.20. Hiring remained relatively stable at 5.393 million (prior: 5.374 million), with the hiring rate holding at 3.4%, continuing to hover at historical lows. Total separations increased to 5.252 million (prior: 5.082 million), pushing the separation rate up to 3.3% (prior: 3.2%). This rise was mainly attributed to a 170,000 increase in voluntary quits, lifting the quits rate to 2.1% (prior: 1.9%) and interrupting the downward trend that had persisted since 2022. Conversely, layoffs declined by 34,000, bringing the layoffs rate down to 1.0% (prior: 1.1%), marking a new low since June of last year and remaining at historically low levels. Overall, the January JOLTs data highlights a labor market characterized by "low hiring and low layoffs," maintaining resilience. However, it is important to note that this report has a significant lag, and the data has yet to reflect the impact of federal government spending cuts and the uncertainty surrounding the shifting tariff policies. Meanwhile, on the previous day, Trump announced a doubling of tariffs on Canadian steel and aluminum to 50% in retaliation for Canada imposing a 25% surcharge on U.S. electricity imports, further threatening to impose the same high tariffs on the automotive sector. However, as Canada subsequently withdrew the surcharge, Trump immediately rescinded the 50% steel and aluminum tariffs on Canada while maintaining the broader 25% tariffs on all steel and aluminum imports with no exemptions. This back-and-forth action caused U.S. stock markets to fluctuate sharply throughout the day. Since taking office, Trump's erratic and shifting tariff policies have continued to inject significant uncertainty into markets. As seen in recent PMI reports, ADP nonfarm employment data, and the Bureau of Labor Statistics (BLS) employment report, the unpredictability of these policies has led businesses to adopt a more cautious approach toward investment, commercial activities, and hiring. As a result, the labor market has exhibited a more pronounced cooling trend, with the impact expected to become more evident in the upcoming February JOLTs report. Read more at Datatrack