Low Hire, Low Fire: The U.S. Labor Market Is Stagnant

Last week’s labor market updates from the U.S. Bureau of Labor Statistics – the Job Openings and Labor Turnover Survey (JOLTS) and the Employment Situation Summary (often dubbed jobs report) – painted a familiar picture of a job market that is neither broken nor booming. With the number of job openings and unemployed persons roughly in balance, low unemployment and modest job gains, conditions appear stable on the surface – and yet, the line between stability and stagnation is thin.

As our chart shows, hires and separations as a share of total employment are near decade lows. Workers, unconvinced of better opportunities elsewhere, hold on to their jobs, while companies have slowed hiring amid economic uncertainty and expectations of productivity gains from AI.

This low-hire, low-fire environment makes it harder for unemployed workers and new entrants to find jobs, contributing to a rise in long-term unemployment and persistently elevated youth unemployment. Currently, 27 percent of unemployed workers have been out of work for 27 weeks or more – the highest share in more than four years – while the unemployment rate for young workers (9.2 percent among 16- to 24-year-olds) remains well above the overall rate of 4.2 percent.

The result is a labor market that looks healthy on the surface but may feel very different depending on a worker’s situation. While workers who already have jobs are relatively well-protected in a low-hire, low-fire economy, those seeking a job face difficult hiring conditions.