January Layoffs Spike to Highest Level Since 2009

Additional Resources

• January 2026 Challenger Report
• Unemployment Insurance Weekly Claims Report
• Revelio Public Labor Statistics Latest Release

Transcript

Pete Newsome: 0:00

Welcome back to Cornering the Job Market for Thursday, February 5th. I’m Pete Newsome, and today is all about labor market data. That sounds super interesting, right? Maybe, maybe not, but it is relevant. It’s important to tell us what is happening in the job market right now. The Challenger Job Cuts report just came out, and it shows the highest January layoff total since 2009. That is not good at all. And hiring plans are the lowest January on record. Unemployment claims spiked. We saw some government data come out today showing that, and uh the economy lost jobs in January. So sorry to be the bearer of bad news this morning. But here’s the twist: a little positive. Salaries and job postings, those are climbing. So that’s a bit of good news. I’ll break that down for you in a minute. Let’s start with the Challenger Job Cuts Report for last month. 108,000 job cuts were announced in January. So again, that is the highest in January since 2009, and we all know it was happening there. A lot of bad, a lot of awful. So this is not good to see at all. Uh the numbers were up 118,000 from last January. And look, these decisions didn’t just happen now, they were made at the end of 2025. So I was optimistic coming into this year, but this is a sign that employers as a whole just were not. They do not like what they’re seeing. And the White House today happened to put out a tweet on X saying you should be so happy about how the job market is going. You know, promises made, promises kept. We’ve all heard that enough. Read the room, read the numbers, read the data. This isn’t telling us that at all. Even the government’s own data that I’ll share in a second. Um, but some outliers from the Challenger report, transportation industry had 31,000 cuts, but that was almost all from UPS. We know that they made a big announcement last week that they were severing ties with Amazon. They weren’t going to do um Amazon deliveries because they weren’t making money on them. So that’s one company that’s driving um you know most of the cuts, or at least a third of all the cuts, but almost all of them in transportation. Uh technology industry had 22,000 cuts, but again, that was Amazon, right? Amazon was 16,000 of those due to their management restructuring.

2:20

And um, you know, there’s not as much blame going AI. That’s that’s good. That’s not really kicked in yet. Um so only 7% of the cuts were attributed to AI. And look, I mean, that’s gonna get bigger. We know that. I know that, I believe that. I guess no one really knows, but I believe that very strongly. So it’s only about 7% right now, and then two years ago for uh for comparison, AI was being cited about 3% of the time in all layoff announcements. So, from a percentage standpoint, that’s a significant jump. But overall, it’s not really moving the number that much yet. I mean, 7% is still significant. I just think it’s gonna be a lot bigger over time. Now, on the hiring side, only 5,300 uh plans were announced by companies going public saying that they’re hiring. And that is the lowest January number since Challenger’s been tracking this, and that’s down 49% from December. That is a big decrease month over month with these announcements. So we see cuts surging, hiring collapsing. Unfortunately, that is the picture there.

3:27

Now, the unemployment claims report also came out. It’s important to note that the jobs report that was delayed. We were supposed to get that tomorrow from the BLS. They did announce today that that is going to come next week. So we’ll see that to what today’s the fifth, so we’ll see it on the 12th. So I’ll look forward to seeing what those numbers look like. I don’t expect they’re going to look great, but can we trust the BLS data anyway? That is up to you individually to make that determination. I tend to like the private numbers better. But in the unemployment claims for this week, initial claims, so the they came out uh jumped 22,000 in one week. 22,000 week over week, more people unemployed filing for unemployment. That’s what that tells us. A total of 231,000 initial claims for the week ending January 31st. So that’s the biggest spike we’ve seen in a while. And well, one week doesn’t make a trend, but when you start seeing all these labor data numbers that are coming in, related all the labor data that’s coming in right now, it sure starts to feel like a trend. Um, continuing claims, a bit of a bright spot. Those were the lowest since October 2024. So, what that means is people aren’t staying on unemployment as long as they have been over the past year or so. So that’s good. But when we see a lack of announcements coming from companies that are going to hire, which is what the Challenger report just told us, I would expect that to trend up in the relatively near future.

4:53

So another report that came out today, Ravelio Labs, they put out their employment report, and what that shows is that the economy as a whole, the whole U.S. economy, according to Revelio, lost about 13,000 jobs in January. So they show an actual decline. Most of this is showing for the most part just stable. The numbers aren’t moving. But but in reality, when you look at 13,000 jobs over the whole market of what about 160 million people working in the US, as a percentage, it’s small. I mean, any loss is bad, but it’s nothing too alarming. So it’s really, I mean, the the message here is just flat, flat, flat uh where we are right now. Education and health services went up by about 41,000 jobs. So healthcare is the one bright spot that keeps adding. Without healthcare, the numbers would probably look really ugly for the economy as a whole right now. Job creation, though, is stalled, right? It’s just stalled. So I won’t call it a collapse. That would be definitely the wrong way to represent it, but um it’s it’s you know, this is not what I expected coming into to January. I’m on record saying that.

6:00

I have to own it, um, but it is what we’re seeing. Now, the report also um talks about salaries, and salaries actually grew in job postings, they climbed two and a half percent in January. So it kind of seems like a little bit of a contradiction, but when companies are hiring fewer people, it makes sense that they could pay more for them because they’re likely more specialized roles, more senior roles. Um, companies are doing more with less, so if they’re gonna you gotta pay for that at some level. Um the average posted salaries that they saw were 75,000, a little over 75,000, which is up 11% year over year when you looked at all of them. So that’s that’s a nice increase. So fewer jobs, but they’re probably gonna be harder to fill. And there’s gonna be more competition for those two. That’s the unfortunate thing for job seekers right now. Now, there wasn’t an outlier in this report. Manufacturing in particular, those salaries were up 23% year over year. That is a massive jump. So we hear a lot about blue-collar jobs or specifically trades jobs, but it you know can expand into manufacturing as well. So the blue-collar world is thriving right now compared to white-collar. That is for sure. The robots have not taken those jobs yet. Um, that’s a good sign and interesting, right? If we look back 10 years ago, you would have thought robots would be the things taking manufacturing jobs when in fact software-based AI is what is taking more jobs, the white-collar jobs. So that is where we are for sure.

7:32

I think it’s all going to be impacted eventually, but right now manufacturing is doing okay. So that is where we are. It’s it’s it’s not a pretty picture. Yeah, I keep waiting for better news. I’m looking for it, I promise, every single day. But we’re seeing layoffs go up, we’re seeing hiring plans really cool off, and the new claims are spiking. So we’ll take the good news, right? As little as it is, continuing claims are low, so people are finding jobs, they’re not staying on unemployment as long, and salaries, specifically in a couple of sectors like manufacturing, are up. So, manufacturing, healthcare, those are places to be right now for sure. So that’s today’s headlines. Thanks for listening as always.

8:18

But before we go, here’s a fun fact in a not so fun job market. Chewing gum. Chewing gum apparently can improve alertness and reaction time at your desk. I’m not chewing gum, but I see my screen bouncing right now as if I am. So there you go. If you want a little boost and be more alert and have better reaction time, I don’t know why you need good reaction time at your desk. Yeah, something coming at you that you need to catch. I don’t know, but chew some gum if you feel like you need a little boost. Thanks for listening. Please like, subscribe, share with anyone you think might be interested. And listen, my commitment, I’ll keep sharing the news as it comes out and giving you my impression of it and knock it on my desk. Keep hoping for something better soon.