New data showed that labour market conditions in the US remain relatively soft. While job losses have been limited, so have job additions. Several economists have referred to the current conditions as “low hire, low fire.” The labour market began to slow in 2025 as businesses pulled back on spending amid economic uncertainty, while economic activity moderated. The increase in the unemployment rate was a key factor in the US Federal Reserve Board (Fed) lowering interest rates three times at the end of 2025.

• Private businesses in the US added 22,000 jobs in January, dropping from the downwardly revised 37,000 job additions in December, according to Automatic Data Processing (ADP). Private business added jobs over the second half of 2025 and into 2026, but at a slower pace than in previous years.
• The health care industry added the most jobs over the month but was partially offset by a decline in jobs in the professional and business services industry.
• ADP commented that wage growth has remained stable despite the slowdown in job growth.
• In the US real estate market, the Mortgage Bankers Association of America reported that the rate on a 30-year fixed-rate mortgage fell from 6.24% to 6.21% over the week ended January 30. Mortgage rates have dropped steadily since last May, due in part to the Fed lowering interest rates.
• Mortgage applications declined by 8.9% over the same week, its second straight decline. Despite lower mortgage rates, uncertainty continues to weigh on purchasing decisions.

Policy, trade and economic uncertainty continue to weigh on consumer and business confidence in the US. Two areas of the US economy that have slowed in response have been the labour and real estate markets. Despite easing slightly in December 2025, the US unemployment rate reached 4.5% in November, its highest level since 2021. Real estate activity in the US has been soft amid sluggish demand.

If you would like to discuss this economic and market update or have questions about your finances and investments, please feel free to contact me anytime.