Labor market is cooling

U.S. hiring is slowing enough that there are now fewer open jobs than unemployed people, a reversal from the post-pandemic scramble for workers. (bls.gov 1) (bls.gov 2) The Bureau of Labor Statistics said employers had 6.9 million job openings in February 2026, while the March household survey counted 7.2 million unemployed people. Hires fell to 4.8 million in February, down 498,000 from January. (bls.gov 1) (bls.gov 2) The hiring rate dropped to 3.1% in February, the lowest since April 2020, even as layoffs and discharges held at 1.7 million and quits held at 3.0 million. In March, payrolls still grew by 178,000, but the unemployment rate was 4.3%. (bls.gov 1) (bls.gov 2) That mix points to a labor market with fewer openings rather than mass job cuts. Indeed Hiring Lab said the unemployment rate has risen from 3.4% in April 2023 to 4.3% in March 2026, a 35-month climb without a recession. (hiringlab.org) (bls.gov) The shift is a long way from 2021, when job openings hit 9.3 million in April while the unemployment rate was 6.1% and employers were struggling to fill roles. Hiring Lab said the labor market is now “emerging from the long shadow of the pandemic” as that boom fades. (bls.gov) (bls.gov) (hiringlab.org) Federal Reserve contacts were describing that cooler backdrop even before the latest data. In the March 4, 2026 Beige Book, business contacts in several districts reported slower hiring, more available candidates, and labor demand that generally no longer exceeded labor supply. (federalreserve.gov) The slowdown is not hitting every measure the same way. March job gains were concentrated in health care, construction, and transportation and warehousing, while federal government employment kept falling. (bls.gov) Workers who lose jobs are also taking longer to find new ones. The number of people unemployed for 27 weeks or more was 1.8 million in March, up 322,000 from a year earlier, and they made up 25.4% of all unemployed people. (bls.gov) Hiring Lab said job postings are back near pre-pandemic levels, layoffs remain low, and output is still growing, which is why the current picture looks more like normalization than collapse. The next tests are whether hiring weakens further and whether low firing can keep offsetting low hiring. (hiringlab.org)