• There are signals coming from employers that hint that layoffs could accelerate this year.
• Layoff announcements rose 28% in January from the prior month, according to Challenger data.
• Business filings of mass layoff plans have also been elevated in recent months.

The resilient US job market could weaken this year, with employers showing early signs that they're readying more job cuts in 2025.

Job cut announcements continued to rise in January, even as the labor market remained on solid footing overall. Layoff announcements swelled to 49,795 over the month of January, according to data from Challenger, Gray and Christmas. That marks a 28% increase from the prior month, though it was the quietest January for layoff announcements since 2022, the career outplacement firm said in a report.

That number looks poised to increase in the coming months, given recent mass layoff announcements, the firm added. Since the start of February, ADM has said it was planning to cut up to 700 workers in its latest cost-cutting measures, while Salesforce and Workday also made plans to cut 1,000 and 1,750 workers, respectively.

"January was relatively quiet in terms of job cut announcements. However, we've already seen major announcements in the early days of February, so it seems this quiet is unlikely to last," Andrew Challenger, the senior vice president of Challenger, wrote in a note.

Meanwhile, WARN filings — regulatory filings businesses with more than 100 workers must submit if they're planning to lay off more than 50 people at a worksite — have also increased in recent months. Companies filed 253 layoff notices in December, with plans to cut 21,873 jobs, according to public records accessed by WARNTracker.com. That's up from the prior month, when firms filed 217 notices, with plans to cut 20,105 workers.

"The number of positions covered by a WARN filing jumped in November and remained relatively high in December. As a result, we still think the trend in claims will rise to about 250K by the end of Q1, reflecting a fading drag from residual seasonability and deterioration in the underlying trend," Samuel Tombs, a chief US economist at Pantheon Macroeconomics, wrote.

Hiring was robust in December. The economy added 256,000 jobs that month, well above the expected 164,000. The jobless rate, meanwhile, remained near a record low, slipping to 4.1%.

Economic forecasters, though, have been observing weaker labor market conditions in the past year, with the unemployment rate climbing 30 basis points throughout 2024.

Friday's jobs report is expected to show that hiring decelerated but continued to grow in January. Economists expect US employers to have added 170,000 jobs, according to FactSet.

‍

Read full article here