The U.S. job market is a mess. Recent information from the Chicago Federal Reserve shows that hiring has dropped to its lowest level since 2009. In 2025, new hirings amounted to only 204,939, representing an astonishing 58% drop compared to the same time last year. This latest downturn comes against the backdrop of a government shutdown that has just entered its second day, with no clear end in sight.
The employment-to-population ratio is increasing, and the jobless level is pretty stable at 4.34%. This figure is an impressive 24% jump over none of 2024. It is dangerously near the 4.4% threshold, which would be a peak not seen since October 2021. Now economists and policymakers are wringing their hands over the state of our labor market. Due to the months-long government shutdown, they have had to increasingly look elsewhere for data.
The hiring rate has fallen to 45.2%, a decrease of 0.4 percentage points from August. Even with all of these challenges, the rate of layoffs per month has flatlined at 2.1%. These numbers show just how much the current labor market is stricken with uncertainty and volatility as we move through 2023.
The increase in planning furloughs is shocking. Levels are now at the highest in three years, 2020 being the year our current Covid pandemic started. This increase in furlough intent is an ominous sign that more permanent job losses could be on the way in the coming months.
Andy Challenger, an expert in labor market trends, noted, “Previous periods with this many job cuts occurred either during recessions or, as was the case in 2005 and 2006, during the first wave of automations that cost jobs in manufacturing and technology.”
With little information available, economists have turned to alternative data. There they face great challenge in truthfully portraying the true hard reality of the labor market. With the government shutdown blocking collection of key economic indicators, analysts are left trying to put together clues from unconventional sources.