Over the past three months, monthly job gains have averaged 35,000—just over one-quarter of the 123,000 recorded in the same period a year earlier. Such a deceleration signals a labor market increasingly resembling a “no-hire, no-fire” environment, where layoffs are infrequent but firms also refrain from new hires.
Some of the muted hiring pressure stems from slower domestic demand, often tied to elevated import tariffs under the current trade policy, which stand at their highest level in a century. A reduced labor supply, influenced in part by stricter immigration enforcement, means fewer jobs are needed to stabilize the unemployment rate; economists estimate fewer than 90,000 new positions per month would be sufficient.
Consumer sentiment is showing strain. A recent survey from the Conference Board indicated that the number of consumers describing jobs as “hard to get” rose to its highest level in roughly four and a half years. Nancy Vanden Houten, lead US economist at Oxford Economics, noted that unemployment has held relatively steady owing to low layoffs, and that slower labor force growth may obscure underlying weaknesses in job creation.
The four-week moving average of initial claims rose modestly by 2,500 to 228,500, suggesting underlying fluctuations despite the headline decline.
These labor indicators are being monitored closely ahead of the Federal Reserve’s policy meeting on Sept. 16-17. Fed Chair Jerome Powell recently signaled that downside risks to employment are increasing, while cautioning that inflation remains a concern. This outlook has helped shape expectations of an interest rate cut by the central bank.