The American labor market has entered a peculiar holding pattern. According to the latest Job Openings and Labor Turnover Survey (JOLTS) released by the Bureau of Labor Statistics, job openings fell to 7.1 million in November 2025—the lowest level in 18 months and a significant drop from 7.45 million the prior month.

But here's the twist: while hiring has slowed dramatically, layoffs haven't picked up. Economists have dubbed this the "low-hire, low-fire" labor market, and it's creating a unique form of economic anxiety that doesn't show up in traditional unemployment statistics.

The Numbers Tell a Paradoxical Story

On the surface, a 4.6% unemployment rate—the level recorded in November—sounds healthy. Historically, anything below 5% is considered "full employment." But beneath that headline figure, the labor market is showing signs of structural strain.

  • Job openings: 7.1 million (lowest since May 2024)
  • Quit rate: 2.0% (unchanged and historically low)
  • Hiring rate: Slowest pace since 2014 outside of pandemic months
  • Layoff rate: Near historic lows at 1.1%

The quit rate is particularly telling. When workers are confident about their prospects, they quit more frequently to pursue better opportunities. The current 2.0% rate suggests employees are "clinging on" to jobs out of fear, according to Indeed economist Nick Bunker.

"This is a 'gut-wrenching' labor market for the middle class. Workers aren't being laid off, but they're stuck in place—unable to find better opportunities and watching their bargaining power evaporate."

— Diane Swonk, Chief Economist, KPMG

Why Employers Aren't Hiring—or Firing

The "low-hire, low-fire" dynamic stems from companies' uncertainty about the economic outlook. With potential tariff wars, Fed policy turmoil, and questions about consumer spending, many employers are choosing to maintain current staffing levels rather than expand or contract.

The Hiring Freeze Factors

Several forces are suppressing new hiring:

  • Economic uncertainty: Businesses are waiting for clarity on trade policy and interest rates before committing to headcount expansion
  • AI investments: Companies are pouring capital into automation rather than new hires, hoping technology will boost productivity
  • Margin pressure: Rising labor costs and sticky inflation have made employers cautious about adding payroll expense
  • Reduced labor supply: Deportation policies, an aging population, and fewer visas have shrunk the available workforce

JPMorgan economists predict the labor market will experience "uncomfortably slow growth" in the first half of 2026, with unemployment potentially peaking at 4.5% before conditions improve later in the year.

The Hidden Cost of Stability

The lack of layoffs might seem like good news, but the frozen job market carries its own costs. Workers who want to change careers, escape toxic workplaces, or negotiate higher salaries find themselves with limited options. The leverage that drove the "Great Resignation" of 2021-2022 has largely evaporated.

For recent graduates entering the workforce, the environment is particularly challenging. Companies that aren't expanding aren't hiring entry-level talent, creating a bottleneck that could have lasting effects on early-career earnings.

"We're in a labor market that's neither hot nor cold—it's frozen. That's actually worse for workers than a dynamic market with more churn."

— Julia Coronado, Founder, MacroPolicy Perspectives

What the Fed Sees

For the Federal Reserve, the cooling job market provides cover to keep interest rates steady rather than pushing for additional cuts. The JOLTS data suggests the labor market is normalizing after the pandemic-era overheating—exactly what Fed officials have been hoping to achieve.

However, the speed of the cooling has raised some concerns. The ratio of job openings to unemployed workers has fallen to 1.1:1, down from a peak of 2:1 in 2022. If the trend continues, the ratio could fall below 1:1 by mid-2026, signaling outright weakness rather than healthy normalization.

Bright Spots and What Comes Next

Not all sectors are frozen. Healthcare, government, and certain technology subsectors continue to hire at reasonable paces. And economists expect conditions to improve in the second half of 2026 as tax cut benefits flow through to consumers and potential Fed rate cuts stimulate activity.

Indeed's 2026 forecast projects job openings could range from 6.8 million to 7.4 million depending on economic scenarios, with unemployment settling between 4.1% and 4.8%. The wide range reflects genuine uncertainty about which direction the market will break.

For workers navigating this environment, the advice from career counselors is consistent: develop skills in high-demand areas, particularly those related to AI implementation; build professional networks proactively; and consider geographic flexibility for better opportunities.

The "low-hire, low-fire" market won't last forever. But for now, American workers find themselves in an uncomfortable limbo—employed but stuck, secure but unable to advance.