The January labor market report, which will be released Friday, will provide traders and investors another opportunity to find out the labor situation around the nation. It also could help solve the riddle of a tale of two labor markets -- a hot one where unemployment remains at record low levels, and a cold one where companies layoff workers in droves.

The tale of the hot labor market looks at the macro picture, the overall economy, and it's supported by a string of labor market reports released by the U.S. Bureau of Labor Statistics (BLS), including one last month. It showed that the U.S economy created 223,000 jobs in December, while the unemployment rate remained at the near-record low level of 3.5%.

The tale of the cold labor market looks at the micro picture. It's supported by a wave of layoffs by the nation's tech giants like Amazon, Microsoft, Google, and Meta, which have announced over 10,000 job cuts each in recent weeks.

David Donovan, the Executive Vice President of Financial Services for a leading digital consultancy, has a couple of good explanations for these contradictory tales of the labor market. First, the layoffs are coming after massive hirings by the same companies in the last two years, and the employee count continues to be higher even after the recent job cuts.

"Tech layoffs grab headlines, but it's important to understand that after over the last two years, most of these companies added significant headcount," Donovan told International Business Times. "For example, Google is laying off 12,000 people but over the past two years hired 37,000 people."

Second, high-tech employees are usually trained and skilled, meaning they can find jobs elsewhere in the tech industry.

"When companies lay people off, they end up getting roles in other companies," Donovan added. For example, "80% of the people laid-off in technology have found new roles in 3 months, and many of these got a pay raise."

That's why Donovan thinks the January report won't reflect the tech layoffs, which he expects to show strong job growth and low unemployment.

Donovan's expectations are consistent with the consensus estimates among Wall Street forecasters, which call for 185,000 jobs and an unemployment rate of 3.6%.

Still, Doug Dennerline, CEO of Betterworks, a performance management platform, sees continued pressure on the economy and turnover in enterprises with reductions in force, which will eventually end the riddle of the hot-cold labor market.

"I think we're in for a difficult 18 to 24 months," he told IBT. "Although we keep seeing little glimmers of hope, I think in the big picture of things worldwide, it's going to be a difficult environment for all the next two years, and unemployment will go from incredibly low to start climbing."

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