Poor Employment Reports Help Rates

BLS Jobs Week Delayed 

This week was supposed to be the big Jobs Report week from the Bureau of Labor Statistics (BLS). Due to the short Federal Government shutdown, several of the reports are being delayed untilnext week. The reports that we did receive showed a very poor employment picture.   

JOLTS Report Shows 2020 Lows 

Job Openings and Labor Turnovers (JOLTS) for December were due on Tuesday but were released on Thursday. It showed job openings totaled 6.5 million, much lower than the estimated 7.2 million. The prior month was also revised lower from 7.15 million to 6.93 million. This was the lowest level since 2020 and shows a very weak labor picture. Remember that in the post-COVID-19 pandemic era, many jobs were posted in multiple geographic markets due to remote work. The multiple job postings could have been for just one job. As a result of this, there is a large level of overcounting in the JOLTS report. 

Challenger Report Shows January Layoffs Surge 

Challenger and Gray issued their Job Cut Report for January.  January is normally a higher job-loss month due to layoffs after the holidays. The report showed there were 108,435 cuts in January, which is triple the amount in December. And it was more than double if you look back at January 2025. This is the highest amount of job cuts for January since 2009. 

ADP and QCEW Revise 2025 Job Growth 

Since it isn’t a government agency, we did get the ADP private payroll 2025 figures and January report on time. They reported there were only 398,000 jobs created for the entire year. This was revised to 212,000 according to the QCEW (Quarterly Census for Employment and Wages) data. On average, that is 33,000 job creations per month. QCEW data is only out through Q2 of 2025, so this number is likely going to be revised lower as the quarterly data is released. The QCEW is the most accurate employment data but is very old. It takes a great deal of time to compile since it isn’t created using statistical modeling. 

ADP January Report Shows Hiring Slowing 

January’s ADP report showed only 22,000 jobs were created, weaker than the 48,000 expected. December’s numbers were also revised lower. The report showed that small and large businesses either lost or remained stable with job creation. Medium-sized businesses gained 41,000 jobs. Normally, large businesses are more insulated from economic conditions. Since there were losses from large businesses, this is a very negative sign. ADP tracks 10 different sectors. Nearly all the job creations came from Education and Health Services. This sector is also insulated from economic forces. We still need doctors, nurses, and teachers, even in bad economies. 

Jobless Claims Rise as Benefits Expire 

Another negative job report that came out this week was the Initial and Continuing Jobless Claims. Initial Claims measures individuals filing for unemployment benefits for the first time. The report showed that these filings rose from 22,000 to 231,000. Continuing claims rose 25,000 to 1.84 million. While this might seem less than the numbers we have seen over the past couple of months, the reason is that people’s benefits expired, not because they found a job. Once they expire, they are no longer counted in the report. 

Looking Ahead: Rates React to Weak Data 

This negative reporting caused a nice rally on Thursday in interest rates that held through Friday. It looks like we still have more room for further improvement if the rally could hold through next week. We will get the BLS Jobs Report on Wednesday.  Further weakness could extend the rally. 

Tuesday, (February 10): Retail Sales, Employment Cost Index 

Wednesday, (February 11): BLS Jobs Report, 10-year Treasury Auction 

Thursday, (February 12): Jobless Claims, 30-year Auction, Existing Home Sales 

Friday, (February 13): Consumer Price Index (CPI) inflation report