U.S. hiring rate just hit its lowest rate since 2020, but Donald Trump’s too busy burning billions
A tough time for taxpayers.
The United States hiring rate just tumbled to 3.1% in February, marking its lowest point since April 2020, according to the latest Job Openings and Labor Turnover Survey (JOLTS) report from the Bureau of Labor Statistics. This is a pretty big deal because that 2020 low was when the economy was literally shut down due to the pandemic. Now, businesses are open, but folks just aren’t getting hired. The immediate question is this another economic consequence of Donald Trump’s war on Iran?
According to Fortune, in February, there were only 4.8 million hires, a number not seen since the forced closures of COVID-19. Moreover, while unemployment is sitting around 4%, employers are still barely bringing anyone on board. It’s definitely a “brutal job market,” as Heather Long, chief economist at Navy Federal Credit Union, put it. She said on X that the 3.1% hiring rate, a level not seen since the economy was completely closed, highlights how little hiring is happening right now.
It seems like Americans aren’t getting laid off, and they’re not quitting their jobs either. They’re just not getting hired. The quits rate stayed low at 1.9%, and layoffs also held steady at 1.1%. Even retirements are near record lows.
This isn’t just a slight dip; it’s a significant pullback
Everyone, it seems, is staying put, whether they’re employed or looking for work. This creates what Nicole Bachaud, a labor economist at ZipRecruiter, described as a “locked-out market” for new entrants. It’s a tough situation driven by a combination of stalled hiring and older workers delaying retirement, which essentially blocks the natural flow of new people into jobs.
Bachaud even noted that aside from the 2020 dip, the hires level hasn’t been this low since 2014, when the labor market was still trying to rebuild after the Great Recession. Two industries, in particular, saw significant hiring pullbacks: hospitality and construction. Bachaud thinks part of this could be due to the brutal weather conditions across the country in February, with blizzards and blackouts hitting hard.
Skanda Amarnath, executive director of Employ America, agreed that bad weather and even some healthcare strikes explain some of the drop, but he stressed that “there’s something fundamental at play, too.” He pointed to reduced immigration as a factor quietly draining dynamism from the system, meaning less population growth leads to less churn and fewer new hires.
Long also flagged the issues in hospitality and construction as a warning sign. These are typically the places where displaced workers can land first, so seeing them struggle isn’t a good sign for the broader economy. “Most people, if they lose a job, think, ‘Okay, I could at least be a bartender or work at a restaurant,’” she said. “And clearly there was a deceleration in that area.”
It’s definitely a worrying time for the job market
What makes this situation even more concerning is that this JOLTS data is from February, before the U.S.-Israeli war on Iran really ramped up and started messing with global energy markets. With Brent crude oil prices soaring above $115 and the Strait of Hormuz effectively closed, there’s a real question about whether this low-hire, low-fire job market can withstand such an energy shock.
Bachaud warned that surging gas prices would undoubtedly hit transportation, manufacturing, retail, and consumer spending, potentially “further pulling back hiring activity in the March data.” Long believes the war could be the “final straw on the camel’s back” for an already fragile labor market. She thinks it’s completely possible that companies could go from just not hiring to actually starting to fire people to balance their budgets.
She also cautioned that the April jobs report, which we’ll see in May, “could really be a first big warning sign.” For the Federal Reserve, this report just deepens the potential for stagflation. Amarnath mentioned that inflation has already been running a full percentage point above the central bank’s target and trending in the wrong direction, even before the war. The Fed definitely needs to “be on guard for risks that their policy is not actually tight enough,” he noted.
The next read on the labor market with the March jobs report, is due on Friday. While economists caution against drawing too direct a line from JOLTS to payrolls, the broader picture is getting harder to ignore. Long said if Friday brings another weak number, “it’s looking more like some early demand issues are back in the picture.
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