Nobody's being fired. Nobody's being hired

The modern American labor market is characterized by a bizarre, low-velocity equilibrium: employers have ceased firing existing workers, but they have also virtually stopped hiring new ones. The national hiring rate has plummeted to 3.4 per cent—its lowest level since 2014, excluding the initial pandemic shock—while layoff rates remain near historical lows.

The Frozen Labor Market

Having spent two years struggling with acute staffing shortages, corporate managers are terrified of laying off workers, opting instead to freeze headcount requisitions and eliminate natural attrition. For existing employees, job security is high, but for new entrants, college graduates, and job switchers, the employment market has become an impenetrable wall. This low-churn equilibrium can easily tip into aggressive layoffs if corporate revenues soften.

The US labor market has settled into a frozen equilibrium of no firings and no hirings, creating a deceptive stability that leaves enterprise payrolls highly vulnerable to any demand shock.