Concerns are Increasing in the 2025 Labor Market

The job market in 2025 is generally assessed to be stagnant. This is positive in some ways: layoffs are steadily continuing, and the unemployment rate has remained historically low. However, there is a downside: it is becoming increasingly difficult for job seekers to find suitable positions.

Large companies, such as Amazon, Verizon, and Target, have raised questions about the state of the job market with their fall layoff announcements, which have been dubbed "no hiring, no layoffs." Economists are closely monitoring this situation.

Heather Long, Chief Economist at Navy Federal Credit Union, stated, "All signs indicate that we are moving towards a job market characterized by 'no hiring, layoffs beginning'."

The Bureau of Labor Statistics in the U.S. will soon provide the first official report on the country's unemployment rate since August. The job report will only cover data related to September and will reflect the situation prior to the period of intensified layoff announcements.

Still, layoff warnings increased by 21,000 across 21 states last month, reaching a high of 39,006, the highest level since 2006. While this figure remains below the number of layoffs during the pandemic in 2020 and the great recession, it represents a significant increase.

On the other hand, personal employment situations have generally remained stable. However, it is evident that people are still struggling to find jobs, even as the economy adds new positions. Whether significant changes will occur alongside companies' plans to reduce their workforce remains an unknown factor.

This situation has caught the attention of Federal Reserve officials. Chris Waller, a Federal Reserve official, stated, "What I've heard over the last four to six weeks is that things are slowly moving out of the 'no hiring, no layoffs' mode."

Tom Barkin, President of the Federal Reserve Bank of Richmond, indicated that some businesses painted a more negative picture than the official data suggested. "When you ask businesses about the current labor market, you get a balanced response. However, when they elaborate on this 'balance,' the situation doesn’t look particularly balanced," he expressed.

Current data indicate that the labor market is growing very slowly or stagnating. Economists anticipate the September report will show similar results. If the November report reveals an increase in layoffs and hiring changes, it could be significant. However, notable layoff announcements typically result in only small changes in the layoff rate.

At this point, the lack of hiring could have bigger repercussions on the labor market. Research by experts indicates that fluctuations in the unemployment rate usually occur during periods when firms are not hiring excessively, causing unemployed individuals to remain jobless for extended periods. Heather Long remarked, "It is certain that the labor market is showing signs of stress."

The government will release a report on job openings and layoffs in October on December 9. However, the unemployment rate and the full job report will not be published this month; instead, the adjusted survey data for October will be released alongside the November job report on December 16.