MNI INTERVIEW: Uncertainty Dominates US Hiring Outlook -Indeed

The uncertainty over trade, geopolitics and AI that has frozen the U.S. labor market even as growth exceeds expectations will have to break one way or the other as the macro picture shifts, Indeed Hiring Lab economist Laura Ullrich told MNI, predicting mediocre payrolls growth in February and potentially negative revisions for January. 

Despite the Indeed job postings index gapping notably higher than the Bureau of Labor Statistics' official JOLTS report over the past few months, there are fewer openings than unemployed persons and time-to-hire has lengthened, in line with an overall softening of the labor market, Ullrich said.   

"I don't think we can stay in this low-hire, low-fire environment forever with economic growth continuing like it has -- unless AI all of a sudden is able to do much more than it can today," Ullrich, director of North American economic research and a former Richmond Fed economist, said in an interview. 

"I can envision a scenario where consumption remains relatively strong, uncertainty does clear up to some extent and so companies start hiring more," she said. "I also can envision a scenario where the opposite happens, where there is a stock market correction from an AI bubble or geopolitical developments and there's a pullback." 

DIVERGENCE

Jobs figures are especially important for the Federal Reserve in the first half of 2026 as it weighs resuming rate cuts, and officials have cited deteriorating job openings in particular as a reason for worry. (See: MNI POLICY: Fed Embraces Pause As Downside Labor Risks Abate)

JOLTS openings dipped below pre-Covid levels late last year, while Indeed’s series remains slightly higher than before the pandemic. December openings, according to JOLTS, fell to their lowest since 2017, while Indeed's inched higher.

The private data series last diverged from JOLTS in the first half of 2024, for which no particular reason was found at the time. In retrospect however with revisions in hand, "that was when the labor market really started slowing down a bit," Ullrich said. 

"So it could be we have these little one- or two-month divergences that just recover and it's just a statistical anomaly, or it's really a pattern. I think it's too early to say."

HEALTH CARE AND AI

More important has been the markedly different evolution in hiring trends from sector to sector, particularly in health care, which has dominated job growth over the past year, Ullrich said, noting jobs in occupational therapy and physical therapy are up 91.1% compared to pre-Covid, while data analytics is down 37%. 

"In health care, we have both constrained supply and high demand," and that is likely to continue, she said. An Indeed analysis of signing bonuses found health care postings continuing to offer extra pay for physicians and nurses, an indication that employers feel pressure to attract workers.

"Not only do we have increased spending on health care because of aging baby boomers, but also because they're wealthy. So long as asset values continue to grow, I think we'll continue to see that generation spend a lot of money on health care, on optional procedures, and also in leisure and hospitality, retail and housing."

The path forward for jobs affected by AI is less certain and is a subject of ongoing research at Indeed, Ullrich said. The share of job postings with AI-related terms rose to 4.7% by end-January. Tech sector layoffs thus far likely reflect a pullback from the over-hiring during Covid, rather than sweeping technological changes, she said. 

"Right now what we're seeing is more of a shift toward investment in capital, in AI, and lower investment in labor. I don't think we're in a world yet where AI is doing all the work -- or even a lot of the work." (See: MNI INTERVIEW: US Labor Market 'On Pause' Amid AI Uncertainty)