by Timothy McQuiston, Vermont Business Magazine Vermont initial weekly unemployment claims fell for the third straight week following the usual volatile labor activity as the end of holiday season played out. For the week ending January 31, 2026, the Vermont Department of Labor reported that there were 358 new claims, down 58 from the previous week and up 10 from last year at this time. New claims are at typical seasonal levels, but ongoing claims remain high. Total claims were 4,276, down 54 from the week before and are up 193 from last year at this time. Claims, which tend to be lowest in the summer, were 181 at the end of September 2024 and 186 in September 2025.
Claims tend to rise and fall around the holidays with temporary hires and layoffs.
In Vermont for the weekly labor UI claims report, manufacturing accounted for 10% of the total, down 2 points from the previous week. Manufacturing overall has become a smaller part of the Vermont economy over the last 25 years and that trend appears to be continuing. The Service industry, which typically accounts for the most claims, last week reported 36% from the previous week, down 2 points. Construction was 36%, up 5 points.
Service hiring is strong during the holidays then slumps, while cold weather slows down construction.
The Montpelier-based Public Assets Institute released its analysis of the labor market in January, which found that the number of Vermonters working has fallen below pre-pandemic levels as of late 2025.
The Vermont DOL is reminding employers that beginning January 1, 2026, Vermont’s minimum wage increased from $14.01 to $14.42 per hour - an increase of $0.41.
The Fed kept its benchmark overnight interest rate in the 3.50%-3.75% range at its January 27-28 meeting. Reuters reported that a soft labor market appears to have stabilized while the trade deficit increased and GDP expectations are still positive but lowered by analysts.
See the Glassdoor labor analysis below.
In the week ending January 31, according to the US DOL, the advance figure for seasonally adjusted initial claims was 231,000, an increase of 22,000 from the previous week's unrevised level of 209,000. The 4-week moving average was 212,250, an increase of 6,000 from the previous week's unrevised average of 206,250.
Wall Street rebounded strongly on Friday (February 6) after two shaky weeks that left the major indices close to a negative year-to-date. The Dow soared about 1,000 points and over 2% after a tech selloff earlier in the week, while the S&P and Nasdaq were also up near 2%.
A partial federal government shutdown was settled February 3 after Democrats in the House opposed ICE funding.
The Vermont Unemployment Trust Fund is well capitalized. As of the most recent data, there was $317.8 million in the Trust Fund, up slightly from the previous week (as claims are paid out on one side, employers are contributing to the fund on the other). The pre-pandemic Trust Fund balance on March 1, 2020, was $506.2 million.
Vermont’s unemployment rate holds at 2.6 percent in December
The Vermont Department of Labor has reported that the seasonally adjusted statewide unemployment rate for December was 2.6%. This reflects no change from the prior month’s revised estimate. Vermont has the third-lowest rate in the nation behind a tie behind Hawaii and South Dakota (2.2%). California has the highest rate at 5.5%.
The comparable United States rate in December was 4.4%, a decrease of one-tenth of one percentage point from the revised November estimate.
The civilian labor force participation rate was 64.0% in December, a decrease of two-tenths of one percentage point from the prior month’s revised estimate.
The data continues to show significant reductions in the Labor Force and Employed month-to-month and year-to-year. The Labor Force is the denominator in the equations, so when it goes down it minimizes the losses in the Employed category. The number of Unemployed is essentially unchanged.
See data tables below.
"The Vermont Department of Labor works directly with employers to help them hire, retain, and support the workers they need to succeed,” said Kendal Smith, Vermont Department of Labor Commissioner. “At the same time, we are helping Vermonters connect with available job opportunities as labor market conditions shift. Maximizing every working Vermonter’s potential helps workers build sustainable careers while strengthening and stabilizing Vermont businesses. Through partnerships with local Department of Labor offices (https://labor.vermont.gov/workforce-development/job-centers
), businesses can access customized services and resources, while workers can explore additional training or education options to support their next steps.”
The seasonally adjusted Vermont data for December show the Vermont civilian labor force decreased by 1,171 from the prior month’s revised estimate. The number of employed persons decreased by 1,207 and the number of unemployed persons increased by 36. The changes to the labor force and the number of employed persons were statistically significant in the seasonally adjusted series.
Corporate Income Tax depresses General Fund revenues again
Secretary of Administration Sarah Clark has released Vermont’s revenue results for December 2025. The General Fund missed its monthly target, while the Transportation Fund and Education Fund both exceeded their monthly targets.
The State’s General Fund, Transportation Fund, and Education Fund receipts were a combined $295.3 million, representing collections of $0.05 million, or 0.02%, above the $295.2 million monthly target in the consensus forecast adopted by the Emergency Board at its July 2025 meeting.
Total General Fund revenues for December were $204.1 million, -$5.3 million or 2.5% below the $209.4 million monthly cash flow target, driven by a second month of significantly lagging Corporate Income Tax receipts. The Personal Income Tax continues to edge above targets, while the Meals & Rooms tax had a catch-up month. Health Care taxes continue to lag and were a concern of the state economists at the last Emergency Board meeting.
Revenues in the Transportation Fund were $27.8 million, representing collections of $2.6 million or 10.4% above target, bouncing back from calendar-impacted revenue totals in December.
Monthly Education Fund revenues of $63.3 million were $2.7 million, or 4.5%, above their December cash flow target of $60.6 million, with all five major components performing ahead of monthly consensus targets.
US DOL Job Openings Survey
The December Job Openings and Labor Turnover Survey #JOLTS report was published Thursday by the US Department of Labor (Thursday Feb 5, 2026) now that the government is open again.
Daniel Zhao, chief economist for employment site Glassdoor (@ Glassdoor) released the following analysis from the jobs report. Glassdoor is now a part of Indeed:
- Job openings dropped sharply to 6,542,000 in December 2025, falling to the lowest level since September 2020. Openings dropped across a variety of industries including retail (-195,000), finance & insurance (-120,000), professional & business services (-257,000), health care & social assistance (-92,000).
- Is the job opening drop a red alert of sudden deterioration in December? Not quite, in my opinion. For one, the openings series is noisy month-to-month. Additionally, the drop in job openings brings it more in line with the more stable hires and quits data points which have already been sluggish since mid-2024.
- The hires rate ticked up to 3.3% in December, but it remains lower than year ago and sluggish overall (comparable to levels from 2013). Even though job openings have been elevated for much of 2024–5, hires have been sluggish over the same period. That juxtaposition has been particularly galling for workers who feel frozen out of the job market.
- The quits rate was flat at 2% in December. Quits are also largely flat compared to a year ago. The stagnant quits rate is likely a sign employed workers aren't finding opportunities on the open market to step up into a better job.
- Layoffs ticked up marginally to 1,782,000 in December. Not a substantial increase, however, layoffs are close to where they were pre-Covid. Despite the constant drip of layoff headlines, layoffs have only been creeping up back to where they were pre-Covid rather than spiking. The sluggish hires rate is likely a better explanation for why workers are so sour on the current job market.
- Overall, today's JOLTS report looks back at the end of 2025 and reinforces that the job market has been stuck in a rut since mid-2024. Despite a relatively solid unemployment rate, laid off workers and new grads feel frozen out of the job market while employed workers feel frozen in place, unable to progress.
2.6.2026. Vermont DOL. https://www.vtlmi.info/
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