US Job Market Shift: Hiring Freezes and Potential Layoffs Emerge

Overview of the US Job Market in 2025

The US job market in 2025 was once thought to be stagnant. This had both good and bad aspects: on one hand, layoffs were stable, and the unemployment rate remained low by historical standards. But on the other hand, job seekers faced considerable difficulty.

However, a series of layoff announcements this autumn by major corporations like Amazon, Verizon, and Target has cast doubt on the so-called 'no-hire, no-fire' state of the labor market. Economists are undoubtedly watching this trend closely.

A Notable Shift in Hiring Strategies

According to Heather Long, chief economist at Navy Federal Credit Union, "All indications are that we are moving from a 'no-hire, no-fire' labor market to a 'no-hire, starting to fire' labor market."

What Do Official Data Say?

The first official unemployment rate report since August will be published tonight. Due to the government shutdown, this jobs report will only cover September data, reflecting the situation before the surge in layoff announcements. According to Challenger, Gray & Christmas, a global re-employment consulting firm, October was the worst month for planned layoffs since 2003.

According to the Federal Reserve Bank of Cleveland, WARN notices, which large companies must issue before large-scale layoffs, surged last month in 21 states to 39,006, one of the highest levels since record-keeping began in 2006. (This number is still lower than the levels during the 2020 pandemic, the Great Recession, and May of this year.)

Impact of Warnings and Layoffs

Prior to these announcements, layoffs and unemployment rates were considered relatively stable, although finding a job was difficult as new jobs in the economy were scarce. Whether this will shift significantly as companies plan job cuts - which is normal for US companies even when the economy is thought to be strong - remains to be seen.

Federal Reserve Concerns

This issue has caught the attention of Federal Reserve officials.

Christopher Waller, a governor of the Federal Reserve, said, "One of the things I'm increasingly hearing is... four to six weeks ago, we were in this 'no-hire, no-fire' mode. Now they're starting to talk about layoffs. They're starting to plan for the future. This may be related to artificial intelligence or many other factors. That's what worries me more."

Meanwhile, Richmond Fed President Tom Barkin said that some companies are painting a more negative picture than current official data shows.

He added, "If you ask businesses how they see the labor market today, they will say it is 'balanced'. But when they describe this 'balance' in more detail, it seems different. Apart from skilled professions, labor seems very abundant, and there are many qualified applicants for each job opening."

He added that "recent layoff announcements by major corporations such as Amazon, Verizon, and Target offer additional reasons for caution."

Current Data and Future Prospects

Robert Shimer, an economics professor at the University of Chicago, says that existing data from private sources so far indicates that the labor market is "growing very slowly or flat," supporting the "no-hire, no-fire" assertion. He believes the September jobs report may show more of the same. Economists expect about 50,000 jobs to be added.

Shimer said, "By the time we get the November report, we may start to see an increase in layoffs in the overall data, and perhaps a change in hiring as well," but those highly publicized large-scale layoff announcements often only lead to slight fluctuations in layoff rates.

Will the "No-Hire" Period Lengthen?

The more serious consequence may be the lack of hiring in the economy: Shimer's research indicates that "unemployment rate fluctuations are mainly driven by companies not hiring many employees, and unemployed workers remaining unemployed for a long time, not specifically due to a surge in layoffs," he said.

However, Long says it is clear at this point that the labor market is showing some signs of weakness.

She added, "The real question is: how much layoff is happening?"

The Department of Labor has announced that the government report showing the number of job vacancies and layoffs for October is scheduled to be released on December 9, but the unemployment rate and the full jobs report for that month will not be released.

Instead, the October institutional survey data will be published along with the November jobs report scheduled for release on December 16.

Disclaimer: The market is risky, and investment requires caution. This article does not constitute personal investment advice and does not take into account the investment objectives, financial situation, or special needs of individual users. Users should consider whether any opinions, views, or conclusions in this article are consistent with their particular circumstances. Investing on this basis is at your own risk.