2025—Glad to See You Go?

Bits of Good News First      

The Bureau of Labor Statistics’ Employment Situation for December showed several positives, although most were small. For example, unemployment was down for whites, African Americans, and the whole labor force. It fell from 30.7% to 18.3% for Black teens but rose for disabled workers from 7% to 7.7%. The overall rate fell from 4.6% to 4.4%. Wonderful if it were true. NJFAN’s more comprehensive unemployment figure fell from 10.9% to 10.7%—the right direction but still way too high. The household survey from which these numbers are derived shows that jobs increased by 232,000.  The larger sample of non-farm employees showed a small increase of just 50,000. More about the latter in a minute. Overall, the report seemed mildly positive.

Low-Fire, Low-Hire—Just a Catchy Phrase?

How should we characterize current job markets? Are we still in a low-fire, low-hire economy as some journalists claim? It’s a catchy phrase, but is it a good focus for us? Let’s check the numbers on layoffs, quits, and hires published by the Bureau of Labor Statistics as part of its Job Openings and Labor Turnover Survey (JOLTS).

How about quit rates? Higher rates generally mean employees are more confident of finding other positions. They suggest that job-seekers have more choices and more bargaining power. Quit rates in the last two years have been low. They are lower than they were in 2018-2023 and about the same as they were in 2015-17. Workers aren’t especially confident about finding new positions, and that supports the low-hire part of the argument. Is it possible there is real job shortage out there?

The rate of job openings has not been particularly low compared to some other periods—it is about equal to the levels of 2018-2020--but it has fallen recently by almost a million a month to 7.1 million vacancies. That’s about the same number as the officially unemployed, but it is less than half the number of truly employed NJFAN shows. We aren’t creating enough jobs.

And what are the statistics on hiring? Are we in a low-hire situation? Perhaps so. But that did not start happening just last year. Monthly hiring rates in 2024-25 have been equivalent to 3.3%-3 5% of total employment. Prior to the pandemic, hiring rates were higher at 3.6%-3.9%. Seems like a tiny difference between the two periods, but it could be the difference between, say, 5.5 million new hires a month and 6 million new hires. It does seem awkward to call 5.5 million hires a sign that we are in a low-hire economy, but 500,000 fewer hires a month is a big deal.

Finally, layoffs? Are we in a low-fire economy? Sort of. But that is nothing new. We usually have low-fire labor markets. The big exception was 2020. We’re a little lower in the layoff rate than we were in 2016-2019, but not by much. Does a layoff rate of 1.2-1.3% a month feel much worse than 1-1.1%? Probably not to most people. The fact seems to be that layoffs are almost always a low percentage of the labor force. There is nothing new about the low-fire economy.

And another source of information indirectly suggests that layoffs are not particularly high, nor that we are in the early stages of a recession. The number of weekly initial claims filed for unemployment benefits has moved within a fairly narrow range over the last year. During most weeks, 220,000 persons filed for benefits and in the last ten weeks fewer than that. If this were the only statistic we had about the economy, we might say things were fairly good. In two recent weeks, new applications for benefits were at their lowest level for the whole year.

But Enough New Jobs?

There is more to be said about whether we are creating enough additional jobs every month. For example, as NJFAN’s unemployment numbers show, there are, on the sidelines, millions of people who would work if there were substantially more hiring and better jobs. The no-hire, no-fire phrase is cute, but it can be a distraction from deeper problems.

Catchy phrases aside, has the U.S. been producing a lot of jobs? It must be, right? This year real Gross Domestic Product—all the stuff and services we produce—has grown strongly since an almost recessionary first quarter: growth rates of 3.8% and 4.3% in the second and third quarters and possibly even stronger growth in the final quarter of 2025. But how about job growth? Between January of 2024 and January 2025, we added 2,000,000 non-farm jobs—a  level that is good but not uncommon. Between January 2025 and December 2025, we added  473,000 jobs. Last year was the worst year for job adds since 2020. And, by the way, Fed chair Jerome Powell believes the real record was worse than these numbers.

We added only 50,000 additional jobs in December to our total, and revisions showed that in October we actual lost a net total of 50,000 non-farm jobs. Kelly Evans of CNBC+ recently highlighted these depressing numbers, and economist Diane Swonk told her, “It’s a jobless boom.”  Lots of money being made, low inflation: It’s “nirvana for the markets,” but Evans added that it might be rough for people who are urgently looking for work.

So while some of the JOLT stats look pretty good, job additions were lousy for much of last year. That may be why quit rates were pretty low—people were not confident about finding new positions. And in some areas job losses were very damaging. Overall, layoffs may not be particularly high, but Federal employment, which normally provides better jobs than the private sector, was cut by almost 300,000. The IRS, the EPA and the Agriculture Department each lost 20 to 25% of their positions. (Surprisingly, the Postal Service was not cut much and it has been remarkably stable for ten years at 600,000. My delivery people usually seem to have an upbeat attitude.)

More than Ever: More Good Jobs 

The focus must be more jobs, not just any jobs, but jobs that bring adequate compensation. The economy is not providing enough jobs, period, and certainly not enough good jobs.  The median weekly wage of full-time workers is $1,214.  That’s about $60,000 a year if you work a full year. So if you do, are you well off? We know $60,000 isn’t that much today, and also, the median means middle. Half the workers get less than and often much less than $1,214.  In the worst case, employees may earn as little $7.25 an hour—about $15,000 for a full year. Facts like these provide more arguments for government to assure that new jobs are good jobs by directly creating them. Also for substantial increases in the all but irrelevant, pathetically low federal minimum wage.