US Job Market Hits 5-Year Low: What This Means for Australia's Employment Landscape

US Job Openings Drop to Lowest Level Since 2020

Recent data reveals that US job openings plummeted to their lowest point in over five years in December 2025, signaling a significant softening in labor market conditions as the year concluded. According to the Bureau of Labor Statistics' Job Openings and Labor Turnover Survey (JOLTS), job openings decreased by 386,000 to 6.542 million by the end of December—the lowest figure since September 2020.

Revised Data and Economic Forecasts

November's data was revised downward, showing 6.928 million job openings instead of the previously reported 7.146 million. This revision came as economists, polled by Reuters, had forecast 7.20 million unfilled jobs. Despite the decline in openings, hiring saw a modest increase of 172,000 positions, reaching 5.293 million in December.

Unemployment Claims and Market Stability

Concurrently, there was a larger-than-expected rise in Americans filing new applications for unemployment benefits last week. Initial claims for state unemployment benefits jumped by 22,000 to a seasonally adjusted 231,000 for the week ended January 31, 2026—the largest increase since early December. Economists had predicted 212,000 claims.

Carl Weinberg, chief economist at High Frequency Economics, noted, "There is no sign of the kind of layoffs we expect to see in a weakening labor market during the early days of a recession. The level of claims is just very low and well within the recent range over the last two years."

Factors Influencing the Data

The surge in jobless claims is attributed to several factors:

• Distortions from snowstorms across much of the country in late January.
• Normalization after volatility linked to difficulties adjusting data for seasonal fluctuations around the holiday season and year-end.
• Heavy snow and freezing temperatures temporarily left some people unemployed, with claims spiking in states like Pennsylvania, New York, and Illinois.

Labor Market in 'Low Hire, Low Fire' Mode

Despite these fluctuations, the labor market remains in what economists describe as a 'low hire, low fire' mode, indicating stability without significant layoffs or hiring spikes. However, the most accurate snapshot of the jobs market, typically provided by Friday's job report, has been delayed due to the US government's latest shutdown.

This data highlights the interconnectedness of global labor markets and offers insights for Australian job seekers and employers monitoring international trends.