The latest U.S. jobs report for January 2025 paints a complex but overall steady picture of the labor market. While hiring slightly slowed and fewer Americans are changing jobs, unemployment dropped to 4%, its lowest level since May 2024, showcasing a largely resilient economy navigating various challenges.¹

Steady, moderated growth with subtle deceleration

According to the Labor Department, the economy added 143,000 jobs in January — a figure that fell short of economists’ forecasts. This comes with a yearly revision showing the monthly job gains in 2024 averaged 166,000, lower than earlier estimates. Though the job market shows signs of moderation, it remains far from stagnant.²

The 4% unemployment rate ended a 7-month streak in which it hovered between 4.1% and 4.2%. The usually stable sectors, including healthcare, social assistance, and retail, continued to be reliable sources of job growth.³

Read more: Where the job market is heading in 2025: 7 trends to anticipate

The "Great Resignation" era ends

A notable trend is the decline in job-switching behavior. Only 39.6 million Americans quit their jobs in 2024, marking an 11% drop from 2023 and a significant 22% decrease from 2022’s peak. This quieting of the "Great Resignation" reflects a shift in labor dynamics post-pandemic.⁴

What’s contributing to this reduced churn? The ratio of job openings to unemployed workers has gradually decreased to 1.1, down from its pandemic-era high of 2 in early 2022, making it less likely for employees to find higher-paying roles quickly. Hiring rates have also eased, with companies adding fewer new positions while focusing on cost control — particularly in white-collar sectors like tech and finance.⁵

Despite these shifts, wages are showing promising upward traction. January saw average hourly earnings jump by 0.5%, standing 4.1% higher year-on-year.⁶

What workers value today

Amid all this, shifting workplace priorities are shaping how employees approach work. Empower research reveals important insights into employee sentiment. Job satisfaction is increasingly influenced by financial factors. Two-thirds of respondents said salary remains the top motivator, outweighing aspirations for promotions or more challenging roles. Business loyalty is valued, with 40% of surveyed individuals favoring long-term rewards over short-term recognition.

Workers also prioritize stability over advancement, as only 23% were planning to ask for a promotion last year and 14% to consider quitting for another job that might pay more. Benefits like retirement plan matching (71%) and financial coaching (48%) rank among top desirable perks, forming a clear “Workplace Wishlist” to attract and retain talent.

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Future outlook

Looking ahead, the Federal Reserve’s policies may play a key role in shaping the job market’s trajectory. While January’s data may have little immediate influence, economic indicators in the coming months may inform the Fed’s decisions regarding interest rate adjustments. The labor market’s ability to “keep cooling for a long time without things breaking,” as noted by economist Guy Berger in The Wall Street Journal, could depend on businesses’ delicate balancing act of maintaining efficiency without resorting to significant layoffs.⁷