Something unusual is happening in the American labour market: employers have stopped firing, but they have also stopped hiring. The latest evidence arrived on Tuesday, September 29, when the Bureau of Labor Statistics published its Job Openings and Labor Turnover Survey — the JOLTS report — for August. Job openings fell by 256,000 to 7.079 million on the last day of the month, below the 7.225 million economists polled by Reuters had expected. Yet layoffs dropped to historically low levels, and hiring rose only modestly.
Economists have a name for this state of affairs: the “no hire, no fire” economy. Job security is strong for those already in work. But the door into new roles has narrowed, and for anyone job hunting, the market feels far tougher than the headline unemployment rate of 4.1% suggests. Understanding this strange equilibrium — and how long it might last — is now essential career intelligence.
The headline numbers, in context
The JOLTS report measures labour demand from the employer's side of the economy, and August's edition was a study in contrasts. Openings — a proxy for how badly firms want workers — declined to 7.079 million. July's figure was revised higher, to 7.335 million from the previously reported 7.271 million, which softens August's drop a little but still leaves openings below economists' forecasts. The job openings rate slipped to 4.3% from 4.4% in July.
Hiring told a slightly brighter story: it rose by 46,000 to 5.192 million, lifting the hires rate to 3.3% from 3.2%. Layoffs and discharges, meanwhile, fell by 61,000 to 1.641 million, with the layoff rate dipping to 1.0% from 1.1% — a level most economists would describe as rock bottom. One caveat is worth noting: the JOLTS survey has been dogged by a low response rate that has fallen considerably since before the pandemic, a concern some economists raise when interpreting the numbers.
Layoffs are rare — and jobless claims hover near 57-year lows
The JOLTS picture is reinforced by the weekly jobless claims data, the most timely read on layoffs available. For the week ended September 19, initial claims for state unemployment benefits slipped by 1,000 to a seasonally adjusted 197,000 — the lowest since mid-July and below the 201,000 economists had forecast. The four-week moving average, which smooths out volatility, fell to 202,250. Claims are now near levels last seen in 1969: a 57-year low.
There are footnotes. Economists note difficulties in seasonally adjusting the data around the moving Labor Day holiday, plus what they call “residual seasonality” that tends to push claims lower as the year winds down. Even so, the underlying trend points to a labour market that has regained its footing after struggling through much of the summer, anchored by exceptionally low layoffs. Notably, initial claims filed by federal employees fell by 38 to 362 — well below historical levels, despite the administration's signals about shrinking the public sector.
But hiring has not really recovered
Here is the catch: low layoffs are doing almost all the work. Employers have added an average of 80,000 jobs a month so far this year — including a surprising 162,000 in August, the most in five months. That is a genuine improvement on a dismal 2025, when monthly job creation averaged just 9,700 as high interest rates and shifting trade policy discouraged hiring.
But it remains far below the 166,000 monthly average recorded in 2023 and 2024, and the 491,000-a-month hiring boom of 2021–22 that followed the end of pandemic lockdowns. A Reuters survey of economists expects September payrolls — the report lands this Friday — to have advanced by only 90,000, with the unemployment rate holding steady at 4.1%. In other words, the economy is adding jobs, but at a pace that barely keeps up with population growth.
Why companies won't hire — or fire
Economists point to a tangle of headwinds. Rising energy prices linked to the US-Israeli war with Iran have squeezed businesses and consumers since fighting began on February 28. Tariffs on imports have raised costs and uncertainty. And worker shortages — as immigration restrictions and retirements shrink the labour supply — are hindering hiring even where demand exists. A September survey from S&P Global noted that companies were “also reporting increasing problems finding suitable staff,” even as business activity rose to its highest in more than five years.
There is also a behavioural explanation: labour hoarding. Businesses that lived through the severe worker shortages of the post-pandemic years are reluctant to let staff go, fearing they will not be able to rehire. So they hold on to the workers they have — and freeze new hiring to control costs. The result is a market with historically low churn: few people losing jobs, and few people changing them.
What it feels like for workers
Official statistics describe stability; workers describe anxiety. Americans put the probability of finding another job after losing one at 45.4% in August, slightly below its trailing 12-month average, according to the New York Federal Reserve — a sign that the hiring freeze is felt even by people who have not been laid off. And while initial claims are low, continuing claims — the number of people still receiving benefits after an initial week of aid, a proxy for how hard it is to get rehired — rose by 2,000 to a seasonally adjusted 1.719 million in the week ended September 12.
“But we would caution that a lower unemployment rate because of a smaller labor force would not necessarily imply a retightening labor market.” — Veronica Clark, economist at Citigroup
A shrinking labour force can flatter the unemployment rate without making jobs any easier to find — something job seekers sense intuitively. The corporate announcements data tells a similar story of restraint. US employers announced 529,914 job cuts through August — down 41% from the same period in 2025 — while announcing plans to hire 119,825 workers, up 37% on the prior year, according to Challenger, Gray & Christmas. Cuts are down and hiring intentions are up, but neither has translated into a hiring boom.
The Federal Reserve factor
Labour market stability is giving the Federal Reserve room to focus on inflation. This month the central bank raised its overnight benchmark interest rate by 25 basis points to the 3.75%–4.00% range — the first hike in three years — and flagged further increases in borrowing costs in the months ahead. Financial markets are pricing in roughly a 70.3% chance of another increase in October, according to CME's FedWatch tool.
Higher-for-longer interest rates are a double-edged sword for workers. They signal that the Fed believes the economy can take it — the central bank itself cites full employment. But they also raise the cost of business investment, which is one more reason for companies to keep hiring plans on ice.
What this means for your career
A “no hire, no fire” market calls for a different playbook than either a boom or a bust:
- Protect the position you have. With hiring frozen at many firms, your current role is your most valuable asset. Be visible, be reliable, and document your contributions — internal mobility often moves before external hiring does.
- Upskill quietly, while you are still employed. The scarcest skills — particularly around AI tools — command real premiums. Learning on the job beats learning between jobs.
- Network before you need it. In a low-churn market, most moves happen through relationships, not job boards. The time to build those relationships is now.
- Keep a financial buffer. Continuing claims are creeping up, which means job searches are taking longer. A larger emergency fund buys you patience — and patience gets better offers.
- Watch the right indicators. The unemployment rate flatters in this environment. Pay more attention to continuing claims, the openings rate, and hiring announcements in your own industry.
What to watch next
September's employment report arrives on Friday, and it will test whether August's payroll strength was a turning point or a blip. Economists expect 90,000 new jobs and unemployment steady at 4.1% — but the more telling numbers may sit beneath the headlines: whether continuing claims keep climbing, whether the openings rate stabilises, and whether hiring intentions turn into actual hires. In a “no hire, no fire” economy, the fire side is settled. Everyone is watching the hire side.
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