The hiring music has stopped — and many workers are still sitting.
It’s a strange picture: an economy that, by many measures, is steaming ahead while employers quietly pull back from hiring. Government data show job openings fell to about 7.1 million in November from 7.4 million in October, the fewest since September 2024 and the second-lowest reading in nearly five years. At the same time layoffs have not surged. The result is a labor market that’s not falling apart, but isn’t doing the heavy lifting Americans expect when GDP is healthy.
The numbers that matter
- Job openings: 7.1 million in November, down from 7.4 million in October (BLS JOLTS).
- Quits: up slightly but still low — roughly 3.16 million people in November; the quits rate sits near 2.0%.
- Layoffs: unchanged at historically modest levels; the layoff rate remains around 1.1% in recent months.
- Private payrolls (ADP): an estimated gain of 41,000 jobs in December after a 29,000 decline in November.
- Paycheck-tracking (Bank of America Institute): a year-over-year pickup to 0.6% in December, from 0.2% in November.
- Structural shifts and automation: firms are squeezing productivity from technology and workflows rather than adding people. Rapid advances in workplace AI and automation tools — from generative models to domain-specific assistants — are changing how work gets done. See how major firms are pushing new AI tools like Microsoft’s MAI models and experimental research products that aim to do more with less staff Microsoft’s MAI-Image-1. Other projects that stitch AI deeper into knowledge work are changing demand for routine roles, too — for example, Google’s experiments that bring search and documents into a single AI flow Gemini Deep Research. The broader debate over whether we’re at an AI inflection point is still live among experts AI’s tipping point debate.
- Employer caution: after pandemic-era hiring swings, many companies appear reluctant to re-expand payrolls rapidly.
- Policy and trade shocks: tariffs and immigration shifts have had concentrated effects on manufacturing and construction employment, undermining some blue-collar sectors that were supposed to drive broad-based hiring.
- Demographics and participation: some older workers are staying employed longer, and changes to immigration flows are tightening parts of the labor supply picture.
Put bluntly: employers are holding on to staff but not hiring aggressively, and workers aren’t moving the way they did earlier in the decade.
Where the pain is landing
Openings fell most sharply in shipping and warehousing, restaurants and hotels, and state and local government, while retail and construction posted modest gains. That patchwork matters: some sectors are desperately short of workers, others are trimming demand for new hires.
Opinion and specialized analysis also point to blue-collar pressure. Trade and tariff policies, declines in manufacturing and weakness in construction have shown up in employment tallies. Economists tracking industry-level data warn that the hoped-for blue-collar boom hasn’t arrived; industrial jobs were down materially year-over-year, and broader trade-and-trades employment sits below its early-2025 peak.
Why this isn’t just a numbers game
Economists call this a “low-hire, low-fire” market. Employers who over-hired during earlier rebounds don’t want to lay people off, but they’re not opening the floodgates to recruit either. That produces an odd equilibrium: solid GDP growth alongside grinding wage stagnation for most households.
Diane Swonk of KPMG put it plainly after the latest releases: growth without broad-based job creation can feel "gut-wrenching." The churn that typically fuels raises and promotions — people quitting to take better-paying roles, firms competing for talent — has largely evaporated. When quits fall, so does the primary mechanism for wage compression to be relieved.
Bank of America data underscore the distributional consequence: higher-income households saw notable after-tax wage growth last month, while middle- and lower-income groups saw much smaller gains. In short, rising headline growth is not translating into real-pay improvements for most.
What’s behind the freeze?
Several forces are colliding:
What this could mean for everyday people
Without robust churn, the usual path for middle-class wage progress — leaving for a better job, demanding higher pay where talent is scarce — weakens. That threatens a K-shaped outcome: gains concentrated at the top while the middle and bottom feel squeezed. A small shock to consumer spending concentrated among the affluent could ripple quickly through an economy propped up by a narrow base of demand.
Policymakers face a tricky trade-off. If hiring never picks up to match output, slower job growth could eventually drag down consumption. If productivity gains from automation are genuine and widespread, the economy might keep expanding without many new jobs — but that would require new policy thinking about training, redistribution, and how gains are shared.
The coming months will be telling. December’s more complete job report and early-quarter payrolls will show whether December’s small private payroll uptick was a blip or the start of a reacceleration. For now, millions of workers are watching an economy that looks healthy from the outside but feels distinctly fragile from the workplace.